The National Credit Act, No 34 of 2005 finally came into operation on 1 June 2007.

The Act provides for a debt relief mechanism whereby Consumers, who are over-indebted, can apply for debt-review in terms whereof their debt repayment obligations are reduced. The aim and purpose of the Act is, amongst others, to assist Consumers to lead a normal economic life without being pressured or victimised by credit providers for payment in circumstances where they can no longer afford to honour their payment obligations unto their credit providers. Consumers will be over-indebted if, after providing for their monthly living expenses, are unable to afford their debt obligations. By availing themselves of the debt relief mechanism provided for in the Act, Consumers can, for example, prevent their assets, including their home, motor vehicle and furniture, from being foreclosed upon and attached by unsympathetic credit providers. Credit Providers are furthermore obligated to participate in the debt review process and cannot avoid it.

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Once a Consumer’s debt obligations have been re-arranged, they will be able to honour their payment obligations unto their credit providers in reduced instalments affordable to them.

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