Reading Time: 2 minutes

BD Live has run a great story highlighting some very positive aspects of Debt Review.

Here is an extract from the full article which you can read at: http://www.bdlive.co.za/businesstimes/2012/10/07/courts-tell-creditors-to-back-off

Courts Tell Creditors To Back Off

ATTEMPTS by some creditors to enforce agreements against borrowers who have gone into debt review, are meeting resistance from the courts.

Legal rulings are being made in support of those who have begun debt counselling in good faith, and who have been willing to fulfil their financial obligations and make payments.

After initial teething problems, the debt-review process now seems to be operating as was intended by the National Credit Act.

…

Hein du Plessis, MD of debt-counselling company DebtSafe, said those who couldn’t repay what they owed often felt powerless against the might of a creditor – who usually had legal expertise and deep pockets.

However, “we have recently had a number of successes in court where creditors, despite a pending and legal debt-review application, chose to proceed with legal action instead of participating and negotiating with the debt counsellor in good faith”.

“The high court has penalised these creditors with [punitive] costs orders, and has not awarded the creditors their judgments as applied for,” Du Plessis said.

“This confirms that if a consumer meets the requirements as set out in the act, the process will be successful.

“Debt review has the teeth to face unreasonable behaviour by creditors.”

Stephan van der Hoven of Van der Hoven Attorneys said that once someone had begun the debt-review process, creditors had to comply with a magistrate’s order on the restructuring of the debt. And creditors couldn’t ignore their own agreements on reorganising the debt with the borrower.

…

As long as an individual under debt review acted in good faith, made their reduced payments and presented their creditors with reasonable offers, that person’s rights would be enforced.

Du Plessis said: …”The courts are becoming much more proficient and knowledgeable in protecting consumer rights.”

Bad debt counsellors and debtors under review who were not acting in good faith, had been “weeded out of the system, and the quality of service has improved”, he said.

Debt counselling was becoming more and more successful, because the role of debt counsellors has been clarified by the courts …”