South Africa's national credit amendment act 7 of 2019: progression or regression for natural person debt relief

South Africa has had a fragmented approach to natural person insolvency by having numerous legislative mechanisms. Statutory relief in the form of sequestration under the insolvency Act, administration orders under the Magistrates Courts Act, and debt relief under the National Credit Act, have failed to aid in the plight of the no income no asset (‘NINA') debtor. Barriers to access and financial obligations in attaining any form of debt relief under these measures have been inherently problematic as will be shown in this contribution. The NINA debtors, as well as the low income low asset (‘LILA') debtors, have had no reasonable prospect of legislative intervention for debt relief. As a result, I submit that due to a dysfunctional development of South African natural person insolvency law, it has sequentially played a contributory role in perpetuating the over indebtedness of many South Africans. To this effect, debtor rehabilitation is an impossibility in the absence of a straight forward mechanism providing for a discharge of debt. This is especially true in the South African context where many consumers are indigent and cannot afford even the most modest forms of sustenance for sustainability. To disregard the plight of the NINA debtor is to not only subject these individuals to a never-ending cycle of debt distress but to further negatively impact an individual's wellbeing for various reasons. For instance, debt issues have been associated with lowered self-esteem, pessimistic outlooks on life and reduced mental health attributed to depression and severe anxiety. Debt has further been linked to a decline in physical health. In this regard, burdened with high repayments, many debtors sacrifice numerous ways to keep healthy such as foregoing medical care and healthy foods. Furthermore, the correlation between debt and suicide cannot be ignored. Financial despair has been found to lead to more suicide attempts than any other psychological condition, barring that of depression. For the abovementioned reasons, it is appropriate to analyse and critique South Africa's current debt relief landscape in order to assist the NINA debtor by suggesting a way forward.

Grantor

Department of Commercial Law

Year dc:date.issued

2021

Author dc:creator

• Klaasen, Jason

Advisor dc:contributor.advisor

• Hutchison, Andrew

• Commercial Law

Handle dc:identifier.uri

http://hdl.handle.net/11427/35752

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/35752