3) Review + Enforcement

Question 1

when can the credit provider terminate the debt review process?

Answer 1

(AND)

1) D is in default with provider
2) 60 business days have passed since consumer first approached counsellor
3) consumer is not waiting for MC hearing to restructure debts

Question 2

how can the credit provider terminate the debt review process?

Answer 2

1) send a notice to D, counsellor and NCR
2) must wait 10 business days after sending the notice before approaching the court to send a summons to D
3) court can say review must resume thereafter

Question 3

when can the consumer terminate the debt review process?

Answer 3

once the restructuring order has been granted by the court, and she has paid off all of her s/t debts and has demonstrated ability to pay off existing l/t in the future

Question 4

how can the consumer terminate the debt review process?

Answer 4

• she can apply for a certificate of clearance from her counsellor and will be able to enter into new agreements
• counsellor will file certificate with bureaux and her negative credit history will be expunged

Question 5

how can low-income consumers be released from their debt burdens?

Answer 5

debt intervention

Question 6

who is eligible for debt intervention?

Answer 6

consumers who:
a) earn less than R7500 per month
AND
b) owe less than R50000 in unsecured debt

Question 7

what happens during the debt intervention process?

Answer 7

consumer goes through a process similar to debt review done by the National Credit Regulator who may refer the cons to the Tribunal

Question 8

who orders for debt intervention?

Answer 8

the Tribunal

Question 9

what are the possible outcomes for intervention?

Answer 9

a) cons debts rearranged for repayment within 5yrs (normal restructuring)
b) or, if not possible, intervention (12 month suspension of repayments)
c) possibly financial literacy training

Question 10

what happens with reassessment in intervention?

Answer 10

• financial position must be reassessed by the NCR after 8 months
• if debts can be successfully rearranged for 5-year-repayment, Tribunal will give restructuring order
• if not, extend intervention period

Question 11

what happens if intervention is extended?

Answer 11

• financial position must be reassessed by the NCR after a further 8 months
• if debts can be successfully rearranged for 5-year-repayment, Tribunal will give restructuring order
• if not, refer to Tribunal for extinguishment of part/all debts
• Tribunal may prohibit new agreements for 6-12months

Question 12

where is info about intervention found in NCA?

Answer 12

National Credit Amendment Act 2019

Question 13

what effect can the Amendment Act have on the market?

Answer 13

• riskier for C to lend to low-inc individuals (financial exclusion)

Question 14

what happens when the cons defaults/breaches the credit agreement?

Answer 14

a) provider has right to uphold agreement and claim repayment (specific performance)
b) provider may cancel agreement and claim return of goods + damages

Question 15

what section is the notice for provider enforcement in?

Answer 15

s129(1)(a)

Question 16

what procedural steps must the provider follow for enforcement?

Answer 16

send her a notice which:

1) draws her attention to the default
2) proposes she approach a debt counsellor / use an alternative NCA dispute resolution method to resolve disputes
3) advise D that should the matter proceed to court, (and C gets a judgement against D) some of D’s assets can be taken and sold to pay the debt

Question 17

who can be used for alternative dispute resolution?

Answer 17

• ADR agents
• ombudsmen
• consumer court

Question 18

when may the C approach the court after sending a notice?

Answer 18

• 10 business days after notice is hand-delivered/posted
• must be 20 business days after the consumer has been in default
• after alternative dispute function has failed

Question 19

what is a summons?

Answer 19

• will be served to D by sheriff of court

- provides them with notice of court hearing and instructs D to appear in court and answer to the case there

Question 20

effects of C enforcement on debt review?

Answer 20

D may not enter into debt review for that particular agreement that was enforced

Question 21

what are the delivery requirements for the s129(1)(a) notice?

Answer 21

• sent by registered post, and follow up with PO to track and ensure it was received by D
  OR
• hand-delivered to an adult at the consumer’s address they stipulated in their agreement

Question 22

what if consumer fails to collect the notice?

Answer 22

if they are notified that it was delivered and failed to pick it up, it is not a good defense

Question 23

what is an ombudsman?

Answer 23

independent person who mediates disputes to get them to agree on a negotiated settlement

Question 24

what is an ADR agent?

Answer 24

an agent which specializes in mediation

Question 25

what right to compensation does C have?

Answer 25

• under certain circumstances for costs incurred for enforcing the debt
• if court believes they suffered an unreasonable delay or exceptional costs due to the cons’s conduct
  eg) intentionally provides false info