15 Feb Your Rights Under Debt Review with Legal Proof

If there’s one thing you should do when under debt review, it’s get to know your legal rights under debt review and responsibilities! It can save you, creditors, and your debt counsellor so much of a headache down the line. It helps to have an intimate knowledge of the National Credit Act 34 of 2005 and the National Credit Amendment Act 19 of 2014. Thus, this article discusses your rights as defined under the acts in easy-to-understand terms.

Your rights under debt review

The acts fight for the protection of both consumers and creditors.

Right to apply

You have the right to apply for debt review if you’re unable to pay your bills and loans as agreed with your creditors (see: section 80)

Confidentiality

All information shared with your debt counsellor is confidential, except what’s legally required for the process. The act doesn’t explicitly state what confidentiality means, but it does provide a general framework:

• The minister of credit regulation has the right to set regulations that will keep information about your credit confidential.
• Creditors must keep your information confidential.
• Everyone involved must participate in “good faith.”

Transparency

You have the right to receive clear information that you can understand about the process, documents, and your credit. In fact, according to South African contract law, a contract is invalid unless you completely understand what you’re agreeing to before signing it.

• The act says you have the right to receive information in an official South African language.
• Debt counsellors are required to provide consumers with proof of receipt of their application, indicating the credit providers listed in the application and every registered credit bureau.
• The Act allows for the Minister to prescribe regulations regarding the timing, manner, form, and content of information to be provided. This ensures that consumers receive clear and understandable information about the debt review process, fees, and potential consequences. As seen in the NCAA; “During the debt review process, credit providers are prohibited from taking legal action, including repossession of assets, summons, or judgments, against consumers.”
• Your debt counsellor must record all agreements between you and creditors.

Fair negotiation

The act says you must comply with reasonable requests made by your debt counsellor, so they can make sure to “facilitate the evaluation of the consumer’s state of indebtedness and the prospects for responsible debt re-arrangement“–the act doesn’t mention the reduction of interest rates and monthly repayments. It does, however, suggest the potential for negotiation and adjustment of repayment terms you can afford.

Payment protection

During the debt review process, credit providers are prohibited from taking legal action, including repossession of assets, summons, or judgments, against you before notifying you of the case or meeting the stringent requirements as set out in section 130 of the NCA.

Remember, always choose a registered debt counsellor who knows the legislation well and will protect your rights and theirs while complying with all regulations.

Get in touch with True North Debt today if you have any questions pertaining to debt review and how to exit it!