Until 2007 consumers in South Africa were able to easily enter into credit agreements with banks and any other company that offered credit. This resulted in consumers spending more than they earned. The National Credit Act (NCA) came into effect in 2007, curbing this excessive lending, but it was too late for many consumers, as they were already hopelessly over-indebted. Over-indebtedness means that consumers are not able to afford general living expenses and honor their debt obligations every month as their expenses exceed their monthly income.
When to seek debt counselling
It is highly advisable that you consult a debt counsellor as soon as you feel you are in financial trouble or you missed one instalment on a credit agreement. Once a summons has been issued and serviced on a specific credit agreement, the NCA can no longer protect you, and the law must take its course.
Section 129 notice
When a consumer is in default on his or her account, and has been in default for at least 20 working days, a credit provider is obliged, according to Section 129 of the NCA, to inform the consumer of the default, and request payment or refer him or her for debt counselling or other forms of debt assistance. The consumer then has 10 working days in which to act on the notice, and apply for debt review or settle the account. Should the consumer take action and approach a debt counsellor, he or she will be placed under debt review, which prevents any legal action being taken against him or her, as well as preventing the repossession of any assets of the consumer.
It is very important that consumers are aware of their rights and not bullied by scare tactics from creditors, but it is even more important for consumers to act immediately when they receive a Section 129 notice and they know they are in financial trouble, as that is the last window of opportunity to prevent a judgment against them.
Do not stick your head in the sand and hope it will go away – the law is on your side, as long as you seek the help you need.
Our Employee Wellbeing Programme (EWP) is available 24 hours a day if you want to find out how to get out of debt. Call us on our EWP number or email us at
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