Section 86A of the National Amendment Act
The National Cedit Amendment Act, Act 7 of 2019 (the Amendment Act), amends the National Credit Act, Act 34 of 2005 (the Act) and came into effect on 17 August 2019. Amongst other provisions, the Amendment Act introduced section 86A into our credit law. The section is line with, and advances, the ambit of the Act, in as far as it relates to the protection of consumers in the credit market place. The section introduces the relief of debt intervention to natural persons, or those married and with a joint estate. From the outset, one must note that Jurstic persons, being companies and CC’s, are excluded from the application of this section. Such relief is available by application to the National Credit Regulator (the NCR), and for a natural person to qualify, they must – at the time of making the application – not have access to the currently existing insolvency measures, the applicant must not earn/recieve an income and if they do, such income – in the 6 months preceding the application – must not have excedded R7500 (Seven Thousand Five Hundred Rands) per month, and must not have secured credit excedding R50 000.00 (Fifty Thousand Rands).
If the application is succesful, the NCR will refer it to the National Credit Tribunal (the Tribunal) for an appropriate order. The Tribunal can make one of the following orders; firsly to declare the applicant as being over indebted and then secondly either; (i) rearrange the applicants credit obligations; (ii) suspend the applicants credit obligations for a period of 12 months; (iii) extinguish in part or in full the applicants credit obligations. Consumers who apply for, and are granted relief, can not further enter into more credit agreements for the period of the intervenrion order. After the order, the NCR must monitor the applicants financial circumstances for a period of 8 (Eight) months after the order and make recommendations to the Tribunal. The Tribunal is further empowered to make any further orders to assist and grant relief to the over indebted applicant. This said, not all consumers will qualify for the relief set out in this section. A consumer who either exceeds the monitory threshholds of this section (either by earning more than R7500.00 per month or has secured credit of more than R50 000.00); or is under a debt administration order; or if the creditor has already taken legal action and has issued summons against the consumer, that consumer will not qualify.