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Debt Review Solution

According to section 86(1) of the NCA, an over-indebted consumer may apply for debt review.1

Where a consumer has applied for debt review in terms of section 86(1), a credit provider who seeks to enforce a credit agreement may terminate the debt review in accordance with section 86(10), but only after ensuring that adequate notices have been sent to the following parties:

  1. the Consumer (by Registered letter)
  2. the Debt Counsellor (by Registered Letter)
  3. the National Credit Regulator (NCR) (by Email)

Traditionally this process results in 3 separate letters being generated and sent via manual, arduous processes.

The credit provider may then proceed with enforcement, but only after ten business days have passed following the proven delivery of the relevant notices (and provided that the other requirements set by section 130(2) have been met2).

The combination of the manual activities required to prepare and distribute these notices add substantial time delays to this process.

However, efficient and effective notifications can be sent by Registered Email and Registered SMS.

The formal digital channels have multiple benefits:

  • reduce the time and costs to generate the required notices,
  • reduce the time taken for the associated delivery, and
  • improve successful delivery rates

A Registration Certificate is produced showing the full audit trail of the communication, including sender, recipient, date and time stamps of the sending and receiving as well as content and attachments. The Registered Digital Channels ensure that the notices are brought to the attention of the required parties (and in an efficient manner), which is a prerequisite to the resulting enforcement to be lawful.

Sources:

1 The National Credit Act [No. 34 of 2005]

2 PERSPECTIVES ON THE TERMINATION OF DEBT REVIEW IN TERMS OF SECTION 86(10) OF THE NATIONAL CREDIT ACT 34 OF 2005