National Credit Act practical implementation

[Eugene]

I totally agree with Johan (I should as he is a collegue in the office next to me) and with regards to my previous post I might add the section 7 of Schedule 3 of the NCA:

General preservation of regulations, rights, duties, notices and other instruments
7. (1) A registration that had been issued in terms of section 15A of the Usury Act, 1968 (Act No. 73 of 1968), by an authority administering exemptions under that section, for an indefinite term and in force immediately before the effective date, has a duration, as from the effective date, of the period determined by regulation for that category of
registration.
(2) Any other right or entitlement enjoyed by, or obligation imposed on, any person in terms of any provision of the previous Act, which had not been spent or fulfilled immediately before the effective date must be considered to be a valid right or entitlement of, or obligation imposed on, that person in terms of any comparable provision of this Act, as from the date that the right, entitlement or obligation first arose, subject to the provisions of this Act.
(3) A notice given by any person to another person in terms of any provision of a previous Act must be considered as notice given in terms of any comparable provision of this Act, as from the date that the notice was given under the previous Act.
(4) A document that, before the effective date, had been served in accordance with a previous Act must be regarded as having been satisfactorily served for any comparable purpose of this Act.

Bottom line would therefore be that: although the old Credit Agreements Act have been repealed and replaced with the NCA, the rights and obligations as per the old Act will still be in force for that specific matter. So Duncan I believe that debtors will not be left with a loophole to sidestep their obligations when it comes to paying your debt.

[Rebel]

Hi Johan, welcome to the Forum Nice to have you here.



I think the tricky thing for most people at the moment is that it is an unknown monster. It seems to be a good thing, but there are a few questions around how it can impact on our business. Does it mean that debtors can worm out of paying us, etc? It seems to be consensus that we'll have to wait for some case law to clear up the details.

Guys,

Maybe by why of a little introduction - I have spent 30 years as a keen student of the orphan subject called "credit". Firstly from behind the desk at a major attorney firm and then in business itself. I have pioneerd the 4 year degree in credit management -drafted the silabus and lobbied till it was recognised - the learnership in debt collection is also my brainchild. For my sins I am an investigator (since 08/08) with the NCR. My spesiality is looking at the debt enforcement practises under the NCA. So don't shoot me - I am only the messenger.

Various declaratory orders are on the table. The most significant that of Gabriel Davel (NRC himself). It has 10 sets of facts that the High Court must look at and see which way the intrepretation will go. Needless to say with the 4 big banks as respondents which ever way the orders are going either the NCR or the banks would appeal.

Just to give you one example - NCR recons that once the "in duplum bucket" is full and the debtor pays a portion of the debt - then the creditor is still not allowed to debit any more section 101 (b) to (g) items. NCR recons once the in duplum max is reached is reached for ever and a day.

Just a point from your discussions - if a debt was incurred before the NCA then the rules of the previous Acts apply except (see transitional provisions in the NCA) that the debtor now needs to get a section 129 letter before you can get any court order AND that debt would be included in debt restructuring IF no legal action in terms of section 130 of the NCA was taken. OPTION - get the legals out before a debtor applies for debt restructuring.

Happy NCA'ing

[Rebel]

Hi,

If my spelling and grammar offend you - remeber I am born and grew up in the states - sorry free states - have no secretary and no spell check - but will try

[IanF]

Hi,

If my spelling and grammar offend you - remeber I am born and grew up in the states - sorry free states - have no secretary and no spell check - but will try

Rebel
You can load a spell checker for your browser just Google it for the browser you are using. Load it and you have it.

[Dave A]

More than happy to have you here, Rebel.

On spelling - I normally leave spelling errors unless they are in the thread title, but I'll be more than happy to play secretary and run spellchecks on your posts if you like.

[duncan drennan]

You can load a spell checker for your browser just Google it for the browser you are using. Load it and you have it.

Or you can use Firefox which has a built in spell checker...

[Rebel]

More than happy to have you here, Rebel.

On spelling - I normally leave spelling errors unless they are in the thread title, but I'll be more than happy to play secretary and run spellchecks on your posts if you like.

Thanks Dave - I do type slower than my thoughts and then forget to review.

[Dave A]

The National Credit Regulator (NCR) has asked the Pretoria High Court to provide clarity on the interpretation of the debt review provisions in the National Credit Act, it said on Wednesday.

This, after finding that most debt restructuring proceedings in magistrate’s courts were not being finalised because of differing views on the proper interpretation of these provisions.

"This had, and continues to have, a major impact on debtors in desperate need for relief by way of debt rearrangement orders as well as on credit providers whose debts are not being serviced," the regulator said in a statement.

"The NCR is of the view that the debt review proceedings should be as inexpensive, expeditious and informal as possible, given that debtors in need of debt re-arrangement are hardly in a position to go through expensive and time consuming court procedures, nor is it likely that such debtors can afford legal representation," it said.

However, it added that its application was opposed by the four major banks, the Credit Providers Association of South Africa, the Furniture Traders' Association of South Africa, Onecor (Pty) Ltd and a debt counsellor.
full story from Business Report here

If the National Credit Regulator is seeking clarity, why the opposition from the banks et al?

[garthu]

From our point of view NCA has had really little to do with the banks willingness to lend. When it first came about, it had impact but minor. Money running out seem to have alot though... weird!!

[Reagen]

The NCA, were fully implemented June 2007, this meant that over-indebted consumers could now approach a registered Debt Counsellor with the intent of having his/her debt obligations restructered, this meant that a Debt Counsellor would negotiate with creditors a reduced installement over an extended period of time.

Restructuring often proved very difficult, due to the fact that household debt is currently measured at 78%, which means for every hundred rand that we have, R78.00 goes towards outstanding debt, thus leaving the consumer with less disposable income. Furthermore, Industry decided on certain norms in order to expedite the process and ensure more consent eg. They agreed that morgage repayments be restructured in line with a term of 320 months, vehicles 84 months, credit cards 60 months. However the plight of the consumer is that not even these terms could be realised, the next sensible thing was to reduce the interest on a particular agreement.

The NCR approached the Pretoria High Court for clarification on the process of obtaining a consent/restructered order as the NCA is silent on the process and Magistrates thus refer to the Magistrates Court Act, which opens up issues ranging from locus standi of Debt Counsellors, Monetary value, jurisdiction to name a few. The NCR is of the opinion that the process should be as informal and inexpensive as possible, the rule 55 application in terms of the Magistrates Court Act proves otherwise.

In line with enforcements of credit agreements, section 127 lays out the voluntary surrender, whereby a consumer applies for a credit agreement to be cancelled, and section 129 the procedure in enforcing an agreement. This provided that before a creditor can enforce any agreement notice should be served on the customer advising him/her that they are in default. Affording the customer with the option of referring the matter to a Debt Counsellor, by way of applying for Debt Review in terms of section 86 of the said Act.

The NCR expressed that they are optimistic that the court would clarify matters in order for over-indebted consumers to access the envisaged relief as set out.

Lets hope that by the 5th of March the court would grant the order and not direct the matter to DTI, this would be to the detriment of over-indebted consumers.

Cheers