Debtfree Magazine November 2017
The November 2017 Issue of Debtfree Magazine. We discuss working with a PDA and getting ready for December.
The November 2017 Issue of Debtfree Magazine. We discuss working with a PDA and getting ready for December.
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The ruling finds that it could not have been the purpose of the legislature<br />
to prevent credit providers and consumers from reaching consensual new<br />
arrangements (like the interest rate charged).<br />
The ruling points out that changes to contracts is usual in business and<br />
in reasonable and responsible negotiations. Especially would this be the<br />
case where it is beneficial to both parties.<br />
The ruling states that Magistrates would not be acting ultra vires (outside<br />
of the scope of their jurisdiction and within the law) if they were to make<br />
such an order changing the interest rates by consent.<br />
The ruling also made mention of various industry guidelines and even NCR<br />
circulars (regarding DCRS and the Debt Review Task Team). While pointing<br />
out that they hold no legal power, they ruled that these circulars and task<br />
team findings do point to a lacuna in the NCA regarding consensual<br />
interest rate reductions.<br />
OUTCOME<br />
The High Court ruled that the consumer was over indebted, put any<br />
‘terminated’ accounts back into the debt review (in terms of NCA Sect<br />
86(11)) and restructured the consumer’s debt obligations including the<br />
interest rate reductions agreed to by consent.<br />
RCS, Woolies and Foschini came out looking greedy with high interest<br />
rates that will probably lead to induplum caps while ABSA, Standard Bank<br />
and Rainbow Finance came out looking like the good guys trying to help<br />
their clients through interest rate reductions.<br />
COURT MATTERS
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