Case Summaries and Analyses - January to March 2011.pdf

Courts application of the law to the facts in

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COURT’S APPLICATION OF THE LAW TO THE FACTS: In deciding the matter, the court analysed the NCA, which aims to “provid(e) for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places priority on the eventual satisfaction of all responsible consumer obligations under credit agreements.” To enforce a credit agreement by way of litigation, the following is relevant: section 130 sets certain pre-requisites for litigation; the consumer has prescribed time limits to react to notices from the credit provider; the credit provider is delayed from approaching the court in certain circumstances; and the powers of the court hearing the matter are limited. Section 130 (1) of the NCA sets the following prerequisites for litigation: (a) The consumer must be in default under the credit agreement; (b) Such default must persist for at least 20 (twenty) business days;
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Page 49 29 April 2011 (c) The credit provider must deliver a notice to the consumer as contemplated in section 86 (10) or section 129 (1) of the NCA; (d) 10 (ten) days must have elapsed after delivery of the notice (in terms of either section 86 (10) or section 129 (1)); (e) The consumer either does not respond to the section 129 (1) notice or rejects the credit provider’s proposals. A section 86 (10) notice serves to terminate a debt review and sets the following additional prerequisites for litigation when a credit agreement is being reviewed: (a) The credit provider must give notice to terminate the review in the prescribed manner to- (i) the consumer; (ii) the debt counsellor; and (iii) the National Credit Regulator. (b) At least 60 (sixty) business days must have elapsed after the consumer applied for debt review before the credit provider gives a section 86 (10) notice. Section 129 (1) (a) of the NCA provides that if the consumer is in default of a particular credit agreement, the credit provider must notify the consumer and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, to resolve any dispute under the agreement or agree on a payment plan. Section 129 (2) provides that subsection (1) is not applicable to a credit agreement which is the subject of a debt restructuring order, or to proceedings in a court that could result in such an order. It does not prohibit a section 86 (10) notice, but simply exempts a credit provider from notifying a consumer of his rights in terms of section 129 (1) (a). The section 86 (10) notice and section 129 (1) notice therefore inform consumers of different processes. Giving both notices does no harm and in fact strengthens a credit provider’s case for enforcement of a credit agreement. However, serving a section 129 (1) notice instead of
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Page 50 29 April 2011 a section 86 (10) notice when a debt review is pending is fatal. A section 86 (10) notice is indispensable when a debt review is underway, even if the credit provider delivers a section 129 (1) notice.
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  • Fall '17
  • Kruger
  • credit score, Credit history, Credit rating, Fair Credit Reporting Act

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