Special Plea: Reckless Credit
Scenario: I have a debt. It is not prescribed. I have being served a summons. I cannot raise a special plea of prescription nor can I raise a special plea of jurisdiction, but I am convinced that the loan, finance etc granted to me was indeed reckless.
What do I now do??
You raise a special plea of reckless credit. In doing so, you do have a bona fide defence and the court may make an order (a) setting aside all or part of the consumer’s rights and obligations under that agreement, as the court determines just and reasonable in the circumstances;
For this to work in practice, you must be in a situation where you were granted credit and you never really had the means to pay back as you were over indebted. There must be a lot of substance and detail to your special plea of reckless credit..
The point of departure is section 83 of the National Credit Act..
Court may suspend reckless credit agreement
83. (1) Despite any provision of law or agreement to the contrary, in any court
proceedings in which a credit agreement is being considered, the court may declare that
the credit agreement is reckless, as determined in accordance with this Part.
(2) If a court declares that a credit agreement is reckless in terms of section 80( l)(a)
or 80(l)(b)(i), the court may make an order-
(a) setting aside all or part of the consumer’s rights and obligations under that agreement, as the court determines just and reasonable in the circumstances;
(b) suspending the force and effect of that credit agreement in accordance with
(3) If a court declares that a credit agreement is reckless in terms of section 80( l)(b)(ii), the court
(a) must further consider whether the consumer is over-indebted at the time of
those court proceedings; and
(b) if the court concludes that the consumer is over-indebted, the court may make an order-
80( l)(b)(ii), the court(i) suspending the force and effect of that credit agreement until a date
determined by the Court when making the order of suspension; and
(ii) restructuring the consumer’s obligations under any other credit agreements, in accordance with section 87.
(4) Before making an order in terms of subsection (3), the court must consider-
(a) the consumer’s current means and ability to pay the consumer’s current
financial obligations that existed at the time the agreement was made; and
(b) the expected date when any such obligation under a credit agreement will be
fully satisfied, assuming the consumer makes all required payments in accordance with any proposed order.
See attached for illustration..
Find attached a particulars of claim and a responding Special Plea of Reckless Credit..