People Management & Legal Support

Debt Review

For Debt Counsellors

Practical Legal Guidance for Debt Review Professionals

Debt review litigation involves considerably more than preparing and filing an application.

VDH Attorneys Incorporated's Debt Counsellor Resource Centre provides practical guidance on the legal and procedural issues that arise throughout the court process - from preparing a court-ready application to opposition, postponements, enforcement issues and the implementation of granted orders.

Our aim is to help Debt Counsellors identify issues early, understand when legal intervention is required and place recommendations before court that are properly supported by the evidence and the National Credit Act.

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Court Applications

Opposed Matters

Legal & Regulatory Guidance

After the Order

Index

Court Applications

PART 1 - GETTING THE ORDER GRANTED

How to Get a Debt Review Court Order Granted: A Court-Ready Checklist for Debt Counsellors

A debt review application is not court-ready merely because a repayment proposal has been generated and a Founding Affidavit has been drafted. The Magistrate must ultimately be satisfied that the statutory requirements have been met, that the facts relied upon are properly supported and that the relief requested is legally competent.

Section 87 of the National Credit Act 34 of 2005 (NCA) requires the Magistrates' Court to conduct a hearing and to consider the proposal, the information before it and the Consumer's financial means, prospects and obligations. Regulation 2 of the Debt Counselling Regulations, 2012 requires a section 86(7)(c) application to proceed under Magistrates' Courts Rule 55 and prescribes the information and supporting affidavits that must accompany it.

The practical lesson is simple: the better the application is prepared before the court date, the greater the prospect that the Magistrate can decide it without avoidable postponement.

The court-ready checklist

1. Confirm Consumer’s Residential and/or Employment Address

The application should be brought in the Magistrates' Court having the appropriate jurisdiction. National Credit Regulator v Nedbank Limited and Others confirmed that the section 86/87 referral is an application under Rule 55 and clarified the procedural framework applicable to these matters.

It is vital to ensure that the court application is issued in the correct jurisdiction. Any judgement or order granted by a court acting without jurisdiction is legally void, considered a nullity, and cannot be enforced or executed.

2. Confirm the Consumer’s particulars and marital regime

Verify the Consumer's full particulars, matrimonial property regime and whether a spouse or other party must participate. A marriage in community of property, a joint credit agreement or another person with a direct and substantial interest can materially affect citation and relief.

3. Reconcile every credit agreement.

The Founding Affidavit, Certificates of Balance, proposal, acceptance letters and draft order should identify the same Credit Providers, account numbers, balances and proposed terms. A mismatch is a predictable source of postponement and opposition.

4. Make sure the affordability evidence supports the proposal.

The Consumer's income, household expenses and distributable amount should be internally consistent. Regulation 24 requires verification of the information used in the assessment. Driskel v Maseko and Othersillustrates the importance of putting sufficient evidence before the court to support the finding of over-indebtedness and the proposed rearrangement.

5. Check that the relief is legally competent.

A Debt Counsellor may recommend only relief that the court is empowered to grant. SA Taxi Securitisation (Pty) Ltd v Lennardconfirmed that a court cannot unilaterally reduce a contractual interest rate merely under section 86(7)(c)(ii). Where a reduced rate is sought, the legal basis - usually a concession or agreement - must be clear.

6. Ensure the Founding Affidavit tells the complete story.

The affidavit must establish the statutory assessment, the Consumer's financial position, the proposed relief and any material facts needed to justify it. In motion proceedings, the founding papers are both pleading and evidence; defects should not be left in the hope that they can be repaired later in reply.

7. Obtain the Consumer's Confirmatory Affidavit.

Regulation 2(2)(e) expressly requires a confirmatory affidavit from the affected Consumer. The Consumer must confirm facts within personal knowledge. If information has changed, update the application rather than obtaining confirmation of stale information.

8. Complete service and retain proof.

The Credit Providers must receive proper notice. National Credit Regulator v Nedbank confirmed the application of the Magistrates' Courts service framework and recognised agreed electronic service. The file should contain proof of service and any consent relied upon.

9. Reassess the matter before the hearing.

Court-readiness is not frozen on the date the Founding Affidavit is signed. Before court, check for changed income, paid-up accounts, updated balances, new opposition, counter-proposals and any court-specific requirement that could prevent finalisation.

10. Prepare the order the court is actually being asked to grant.

The draft order must correspond with the evidence and proposal. An order that is mathematically impossible, legally incompetent or inconsistent with the papers may create a problem that survives long after the hearing. FirstRand Bank Ltd v McLachlan and Others is a reminder that an invalid debt review order can generate later litigation rather than finality.

A strong court pack is focused, verified and legally relevant. More documents are not always better. The objective is to place the material the Magistrate requires before court, while avoiding unexplained contradictions and unnecessary annexures.

Key authorities

· National Credit Act 34 of 2005: sections 78, 79, 86, 87 and 88.

· Debt Counselling Regulations, 2012: regulation 2.

· National Credit Regulations, 2006: regulation 24.

· Magistrates' Courts Rule 55.

· National Credit Regulator v Nedbank Limited and Others (19638/2008) [2009] ZAGPPHC 100; 2009 (6) SA 295 (GNP).

· Driskel v Maseko and Others(A100/2016) [2017] ZAFSHC 150.

· SA Taxi Securitisation (Pty) Ltd v Lennard (CA166/2010) [2010] ZAECGHC 131; 2012 (2) SA 456 (ECG).

· FirstRand Bank Ltd v McLachlan and Others (394/2019) [2020] ZASCA 31.

What Makes a Debt Review Application Court-Ready?

The phrase court-ready should mean more than "we have a court date".

A debt review matter is court-ready when the application is procedurally complete, factually supported, internally consistent and capable of producing a lawful, implementable order on the evidence before the Magistrate.

Four tests for court-readiness

1. Procedural completeness

The application must comply with the NCA, the Debt Counselling Regulations and Rule 55. At minimum, this means that the correct parties are before court, the Founding Affidavit contains the prescribed information, the Consumer's Confirmatory Affidavit is available, service has been properly dealt with and the application is enrolled in accordance with the relevant court's process.

Regulation 2 is particularly important. It is not merely a drafting preference: it prescribes the content that must support a section 86(7)(c) application.

2. Evidential sufficiency

The court must be able to understand how the Debt Counsellor reached the conclusion that the Consumer is over-indebted and why the proposed rearrangement is reasonable.

In Driskel v Maseko and Others, the High Court emphasised that the party seeking debt rearrangement bears the burden of putting sufficient evidence before the court. A bare conclusion that a Consumer is over-indebted is not a substitute for an evidenced assessment.

Income should therefore correspond with payslips, bank statements or other appropriate proof. Material household expenses should be capable of explanation. Where a spouse or partner contributes to shared expenses, the household calculation should show how that contribution was treated.

3. Internal consistency

A court pack should tell one coherent story.

Check whether:

· the Consumer details match throughout;

· the Credit Provider names and account numbers match;

· balances in the proposal correspond with the information used by the Debt Counsellor;

· acceptance letters correspond with the terms placed before court;

· the budget used in the Founding Affidavit matches the affordability calculation;

· the distributable amount is mathematically consistent; and

· the draft order mirrors the relief actually sought.

A single inconsistency may be harmless. Multiple inconsistencies undermine confidence in the assessment and may justify a postponement for clarification.

4. Legal competence

The court can grant only relief authorised by law.

This becomes particularly important with interest rates, extended repayment periods, account exclusions and additional prayers. SA Taxi Securitisation v Lennard makes clear that section 86(7)(c)(ii) cannot be used to authorise relief beyond the statute. A concession by a Credit Provider may permit terms that the court could not impose unilaterally, but the concession should be properly evidenced.

Court-ready does not mean document-heavy

A frequent operational error is to respond to a query from one Magistrate by adding the same document to every application in every court.

That approach can make applications longer without making them better.

VDH's preferred approach is to distinguish between:

· a statutory requirement;

· a requirement in the Rules;

· a binding or relevant judicial decision;

· a written practice directive;

· an administrative filing requirement; and

· an individual judicial preference or request arising from the facts of a particular matter.

The application should contain what is legally and evidentially necessary, together with additional court-specific material where it is genuinely required.

A practical pre-court review

Before the hearing, ask:

1. Can the Magistrate identify the Consumer, parties and accounts without confusion?

2. Can the Magistrate see how over-indebtedness was determined?

3. Can the proposed payment be reconciled to income and expenses?

4. Is every material fact supported where support is reasonably required?

5. Is the relief lawful and implementable?

6. Is there any outstanding opposition, counter-proposal or service problem?

7. Has anything changed since the papers were signed?

If any answer is "no", the file is not yet genuinely court-ready.

Key authorities

· National Credit Act 34 of 2005: sections 79, 86 and 87.

· National Credit Regulations, 2006: regulation 24.

· Debt Counselling Regulations, 2012: regulation 2.

· Magistrates' Courts Rule 55.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

· Driskel v Maseko and Others[2017] ZAFSHC 150.

· SA Taxi Securitisation (Pty) Ltd v Lennard [2010] ZAECGHC 131.

The Confirmatory Affidavit: What Debt Counsellors Need to Know

The Consumer's Confirmatory Affidavit is sometimes treated as a final administrative formality. It should not be.

Regulation 2(2)(e) of the Debt Counselling Regulations, 2012 expressly requires a confirmatory affidavit from the affected Consumer in a section 86(7)(c) court application.

Why the Consumer must confirm

The Debt Counsellor can testify to the statutory assessment, communications, proposal and the work performed in the debt review process. The Debt Counsellor does not, however, have personal knowledge of every fact concerning the Consumer's household, income, expenses, employment, dependants or personal circumstances.

The Consumer's affidavit bridges that evidential gap by confirming the facts that fall within the Consumer's own knowledge.

The affidavit must correspond with the Founding Affidavit

A Confirmatory Affidavit should not simply be generated and signed months after the Founding Affidavit without checking whether the information remains correct.

If the Consumer has:

· changed employment;

· experienced a material income increase or reduction;

· moved residence;

· married, divorced or separated;

· acquired or lost a dependant;

· had an account paid up or subjected to enforcement; or

· experienced a material change in household expenditure,

those changes may require amendment or supplementary evidence before the Consumer can responsibly confirm the application.

Commissioning matters

An affidavit is evidence under oath. The Consumer should sign in the presence of an authorised Commissioner of Oaths and comply with the applicable commissioning requirements. Where the original is required by the relevant court or filing practice, arrangements should be made early enough to avoid a court-date crisis.

Consumers who are overseas, medically unable to travel or facing another genuine practical difficulty should not simply be marked as "non-cooperative". The difficulty should be escalated so that a lawful practical solution can be considered.

What if the Consumer refuses to sign?

The first question is why.

A refusal may reveal that:

· the Consumer says the income is wrong;

· an account is missing;

· the proposal no longer reflects affordability;

· marital status is incorrect;

· the Consumer does not understand the affidavit; or

· the Consumer no longer wishes to cooperate with the process.

Each of those scenarios requires a different response.

Document all attempts to obtain cooperation and the Consumer's stated reason. Do not ask the Consumer to confirm information that the Debt Counsellor knows is inaccurate merely to preserve a court date.

Special or supplementary confirmatory evidence

Some matters require more than the standard Consumer confirmation. Examples include:

· a spousal or partner contribution affidavit;

· confirmation of unusual household expenditure;

· an affidavit explaining changes since the Founding Affidavit;

· evidence addressing a Credit Provider's opposition; or

· confirmation of facts specifically raised by the Magistrate.

The purpose must remain evidential: place reliable facts before the court, not merely create volume.

Key authorities

· Debt Counselling Regulations, 2012: regulation 2(2)(e).

· Magistrates' Courts Rule 55.

· Driskel v Maseko and Others(A100/2016) [2017] ZAFSHC 150.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

Marital Status, Joint Applications and Spousal Contributions

Marital status is not a demographic field. It can determine the parties, the estate being assessed, the household budget and whether the court application is properly constituted.

Married in community of property

Spouses married in community of property ordinarily have a joint estate. The Matrimonial Property Act 88 of 1984 regulates litigation affecting that estate, including circumstances in which both spouses may be sued or must participate.

For debt review purposes, the financial assessment cannot sensibly be divided into two artificial estates where the law recognises one joint estate. NCR guidance has accordingly treated spouses married in community of property as a joint debt review application.

The practical approach is:

· identify both spouses from the outset;

· obtain both sets of income and expenditure information;

· identify all credit agreements affecting the joint estate;

· disclose existing debt review orders or litigation involving either spouse; and

· ensure the court application properly reflects the joint estate.

A later marriage can produce unusual problems where one spouse already has a debt review order. Those matters require full disclosure of the chronology and file-specific legal assessment rather than an attempt to conceal the existing order.

Married out of community of property

Ordinarily, spouses are married out of community of property where a valid antenuptial contract was executed and registered, or where a competent court order has lawfully changed the matrimonial property system. A private understanding between spouses is not, by itself, a substitute for the formal legal regime.

Sections 86 and 87 do not automatically require the non-applicant spouse to become a co-applicant merely because the parties are married out of community of property.

That does not mean the spouse's financial contribution is irrelevant.

Spousal contribution and section 78(3)

Section 78(3)(b) of the NCA expressly provides that a Consumer's "financial means, prospects and obligations" may include those of another adult person in the immediate family or household to the extent that they customarily share financial means and mutually bear financial obligations.

The purpose is not to make the non-applicant spouse liable for the Consumer's debts. It is to calculate the Consumer's real household burden.

If a Consumer earns R20 000 and claims R18 000 of shared household expenses while a spouse earning R40 000 pays a substantial portion of those same expenses, the Debt Counsellor must establish the true allocation. Otherwise the distributable income is distorted.

Sonnenberg v Wesbank illustrates the statutory relevance of household contributions under section 78(3)(b).

A Spousal Contribution Affidavit can be useful where it confirms:

· the spouse's contribution to rent or bond payments;

· responsibility for groceries, utilities, school fees or insurance;

· how shared expenses are divided; and

· whether the household arrangement is fixed or variable.

Separation and divorce

Separation does not itself dissolve the marriage or change the matrimonial property regime. A marriage is dissolved by a decree of divorce under the Divorce Act 70 of 1979.

If divorce proceedings are pending but no divorce order has been granted, the Debt Counsellor must assess the legal marital status as it presently exists while also accurately recording the practical household position.

Non-joinder risk

The general joinder test is whether a person has a direct and substantial legal interest that may be prejudicially affected by the order. The Supreme Court of Appeal has repeatedly applied that principle. In a joint-estate context, the risk should be considered before issuing the application rather than after a Magistrate raises it.

The following should be discussed with an Attorney:

· spouses married in community of property are not both available to participate;

· one spouse already has a debt review order;

· the marital regime is disputed or cannot be verified;

· a divorce is pending;

· the Consumer recently married after entering debt review;

· a joint bond or joint credit agreement is involved but only one party is under review; or

· a spouse refuses to provide information required to explain the household budget.

Key authorities

· National Credit Act 34 of 2005: sections 78(3), 79, 86 and 87.

· Matrimonial Property Act 88 of 1984: especially sections 17 and 23.

· Divorce Act 70 of 1979: section 3.

· Deeds Registries Act 47 of 1937: sections 86 and 87 concerning antenuptial contracts.

· Sonnenberg v Wesbank, a Division of FirstRand Ltd (1888/2017) [2018] ZANCHC 90.

· Shackleton Credit Management (Pty) Ltd v Deolall and Another (705/2022) [2026] ZANWHC 153.

· Judicial Service Commission v Cape Bar Council 2013 (1) SA 170 (SCA) - direct and substantial interest test.

Why Debt Review Applications Are Postponed - and How to Avoid It

A postponement is not necessarily a failure. Some matters genuinely require further evidence, a response to opposition or clarification from a party. But repeated avoidable postponements increase cost, delay finality and create enforcement risk.

The most useful question is therefore not simply "Why was the matter postponed?" but "Could this issue reasonably have been identified before court?"

Common avoidable causes

Incomplete or inconsistent Consumer information

A Founding Affidavit reflecting one income figure while the latest payslip reflects another invites questions. The same applies to unexplained household expenses, an incorrect marital status or a budget that no longer reflects the Consumer's circumstances.

Proposal and account mismatches

Common examples include:

· an incorrect account number;

· an account reflected in one document but omitted from another;

· a proposal that does not correspond with an acceptance; or

· a draft order that does not match the proposal before court.

Missing Confirmatory Affidavit or supporting evidence

Regulation 2 requires the Consumer's Confirmatory Affidavit. Courts may also require evidence necessary to decide a particular issue. Waiting until the week of court to obtain original affidavits or material supporting documents makes postponement more likely.

Unresolved opposition

Formal opposition should trigger a litigation workflow. The issues must be identified, instructions obtained and a replying affidavit prepared where appropriate. An application should not arrive at the hearing with an unanswered material allegation simply because the opposition was received late or was administratively misclassified.

Court-specific requirements

Some Magistrates' Courts have written practice requirements; others develop local administrative practices. These should be known and tracked. However, a recurring request from a court should not automatically be treated as a national legal requirement.

Unavoidable or justifiable postponements

A matter may properly be postponed where:

· opposition raises genuinely new evidence;

· the Magistrate directs oral evidence under Rule 55;

· a material change in circumstances occurs shortly before court;

· a party seeks to introduce a legally significant issue requiring a fair opportunity to respond;

· an unforeseen service or jurisdiction issue arises; or

· the court itself cannot hear the matter.

The objective is not "zero postponements" at all costs. The objective is to eliminate postponements caused by defects that could reasonably have been identified and cured earlier.

A pre-hearing prevention routine

At least sufficiently in advance of the hearing to permit corrective action, review:

1. Consumer contact and cooperation.

2. Original/valid affidavits required for the jurisdiction.

3. Current proof of income and material expenses.

4. COBs, acceptances and proposal figures.

5. New Credit Provider correspondence or opposition.

6. Marital-status and joinder issues.

7. Service evidence.

8. Draft order and legal competence of relief.

9. Any prior postponement reason - has it actually been cured?

Key authorities

· National Credit Act 34 of 2005: sections 86 and 87.

· Debt Counselling Regulations, 2012: regulation 2.

· Magistrates' Courts Rule 55.

· Driskel v Maseko and Others[2017] ZAFSHC 150.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

Court-Specific Requirements: What Is Law, What Is Practice and What Can Be Challenged?

Debt review is practised nationally, but Magistrates' Courts do not always apply identical administrative requirements. Debt Counsellors therefore need to distinguish a legal requirement from a local practice or an individual judicial request.

The hierarchy matters

A useful hierarchy is:

1. The National Credit Act.

2. Regulations made under the NCA, including the Debt Counselling Regulations and National Credit Regulations.

3. The Magistrates' Courts Act and Rules, including Rule 55.

4. Binding judicial authority.

5. Valid written practice directives or rules regulating filing and case management.

6. Administrative preferences and individual requests.

A guideline, checklist or local practice can be extremely useful, but it should not casually be treated as though it amends the NCA or Rule 55.

The role of the NCR Court Application Guidelines

The NCR's Debt Review Court Application Guidelines are an important practical reference. They do not, however, have the same status as legislation or court rules. The Guidelines themselves recognise that they cannot create, remove or alter rights and obligations determined by law.

That distinction matters where, for example, a court requests a document that is not prescribed by Regulation 2 or Rule 55.

What should a Debt Counsellor do with an additional local requirement?

The answer is rarely "ignore it".

A sensible process is:

· establish whether there is a written directive or merely a request in a particular matter;

· establish the purpose of the document;

· determine whether equivalent evidence is already before court;

· comply where the requirement is lawful, practical and does not prejudice the matter;

· where compliance is impossible or the requirement is treated as a jurisdictional prerequisite without legal foundation, refer it for legal assessment; and

· preserve the request and the legal basis relied upon by the court.

The VDH Declaratory Order

The 2015 declaratory proceedings initiated by Van der Hoven Attorneys were directed at recurring practical difficulties in debt review applications. The resulting order - commonly referred to in the industry as the VDH Declaratory Order - addressed issues such as Consumer attendance, service, documents and the treatment of accepted terms. It remains a useful example of when recurring procedural uncertainty should be resolved through proper legal clarification rather than informal practice becoming entrenched by repetition.

When should a requirement be challenged?

A challenge may be appropriate where the requirement:

· contradicts the NCA or Regulations;

· prevents relief that the statute authorises;

· purports to create a new jurisdictional prerequisite;

· is applied inconsistently and materially prejudices litigants;

· requires evidence that cannot rationally assist the statutory enquiry; or

· risks dismissal rather than allowing a fair opportunity for legal argument.

The decision must still be strategic. Sometimes providing an easily obtainable document is more efficient than litigating the point. The distinction is between pragmatic compliance and accepting an unsupported rule as law.

Key authorities

· National Credit Act 34 of 2005: sections 86 and 87.

· Debt Counselling Regulations, 2012: regulation 2.

· Magistrates' Courts Rule 55.

· Rules Board for Courts of Law Act 107 of 1985.

· NCR Debt Review Court Application Guidelines 001/2016.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

· Van der Hoven Attorneys declaratory proceedings, Case 10918/2014, Gauteng Division, Pretoria, order dated 26 May 2015.

The 60-Business-Day Window: Why Progressing the Court Application Matters

The "60-business-day rule" is frequently misunderstood. It is not a statutory promise that a court order must be granted within 60 business days. It is, however, an important enforcement-risk marker.

The current statutory position

Section 86(10)(a) of the NCA permits a Credit Provider, where the Consumer is in default under the credit agreement being reviewed, to give notice terminating the review in respect of that agreement at least 60 business days after the Consumer applied for debt review.

Section 86(10)(b), introduced by amendment after the earlier case law, now provides that a Credit Provider may not terminate a debt review application if the application has already been filed in court or in the Tribunal.

The operational implication is important: the critical protection is linked to filing the application, not merely drafting a proposal or corresponding with Credit Providers.

Do not rely on Collett without the amendment

Collett v FirstRand Bank Ltd remains foundational debt review authority, but its section 86(10) analysis concerned the statutory wording before the 2014 amendment. Under that earlier wording the SCA held that termination could occur even after referral while the court process was pending.

The later amendment changed that position. Current section 86(10)(b) expressly protects an application once filed in court or the Tribunal.

Recent cases such as SA Taxi Impact Fund (RF) (Pty) Ltd v Jacobsapply the amended framework and reinforce the importance of the procedural chronology.

What should be on the file?

For every matter approaching the 60-business-day mark, the Debt Counsellor should be able to establish:

· the date of the Consumer's section 86(1) application;

· the date Form 17.1 was dispatched;

· the date of the section 86(6) determination/Form 17.2;

· proposal dates and Credit Provider responses;

· the date the attorney was instructed;

· the date the application was issued/filed in court;

· proof of filing; and

· any termination notice received.

A termination notice requires legal triage

Do not assume that every notice headed "section 86(10)" is effective. Establish:

1. Was the Consumer in default under that agreement?

2. Had at least 60 business days elapsed from the section 86(1) application?

3. Had the debt review application already been filed in court or the Tribunal?

4. Does the notice relate to the same agreement?

5. Were there prior enforcement steps that may already have excluded the agreement under section 86(2)?

The safest operational approach is not to work towards day 60. It is to progress the matter as soon as the assessment and proposal process permits, leaving sufficient time to correct documents, commission affidavits and issue the application before enforcement risk crystallises.

Key authorities

· National Credit Act 34 of 2005: sections 86(2), 86(10)(a), 86(10)(b), 87 and 88.

· Collett v FirstRand Bank Ltd and Another (766/2010) [2011] ZASCA 78 - read with the subsequent statutory amendment.

· SA Taxi Impact Fund (RF) (Pty) Ltd v Jacobs (10003/2023) [2024] ZAWCHC 278.

· Potpale Investments (Pty) Ltd v Zondi (8843/21P) [2022] ZAKZPHC 41.

FirstRand Bank Ltd v Hardijzer [2020] ZAGPPHC 339.

Opposed Matters

PART 2 - OPPOSED AND DIFFICULT MATTERS

What to Do When a Credit Provider Opposes a Debt Review Application

Opposition does not mean the application has failed. It means that a dispute has moved from negotiation into formal litigation and must be treated accordingly.

First identify what you have received

Not every objection is an answering affidavit.

Distinguish between:

· a rejection of the original proposal;

· a counter-proposal;

· correspondence requesting documents;

· a notice raising a point of law;

· a formal notice of intention to oppose; and

· an answering affidavit under Rule 55.

That classification determines the response and the timetable.

Read the opposition for the real issue

An answering affidavit may contain many pages but only a few material disputes. Typical issues include:

· affordability and allegedly excessive living expenses;

· an insufficient repayment to a secured Credit Provider;

· an unlawful or unsupported interest-rate proposal;

· a balance or account-number dispute;

· prior enforcement and section 86(2);

· a marital-status or joinder issue;

· alleged non-compliance with Regulation 24;

· reckless-credit allegations; or

· a procedural challenge to service or evidence.

Remember the Debt Counsellor's role

In National Credit Regulator v Nedbank, the High Court described the Debt Counsellor as a neutral functionary performing a statutory role and having a duty to assist the court.

Opposition should therefore not transform the Debt Counsellor into a partisan litigant who automatically rejects everything a Credit Provider says.

Equally, neutrality does not mean capitulation. The Debt Counsellor must be able to explain and defend a reasonable recommendation where the evidence supports it.

Decide the route

An opposed matter usually requires one or more of the following:

· correction of an objective error;

· additional evidence;

· a replying affidavit;

· a revised proposal;

· negotiation around a counter-proposal;

· settlement of a discrete issue; or

· legal argument before the Magistrate.

Good faith is not automatic acceptance

Section 86(5) requires the parties to participate in good faith in the review and negotiations. Hattingh v FirstRand Bank Ltd and SA Taxi Impact Fund v Jacobsdemonstrate that good faith must be assessed in context. A Credit Provider does not act in bad faith merely because its counter-proposal is unattractive, and a Debt Counsellor is not obliged to accept a proposal that is unaffordable or legally unsound.

What does the Attorney need to prepare for argument?

Provide:

· the latest proposal and all earlier materially relevant versions;

· COBs and acceptance/counter-proposal correspondence;

· current proof of income and material expenses;

· Consumer instructions on disputed facts; and

· a short summary identifying the Debt Counsellor's position on each issue.

Key authorities

· National Credit Act 34 of 2005: sections 86(5), 86(7) and 87.

· Magistrates' Courts Rule 55.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

· Hattingh v FirstRand Bank Ltd(1299/16) [2017] ZANCHC 34.

· SA Taxi Impact Fund (RF) (Pty) Ltd v Jacobs [2024] ZAWCHC 278.

Counter-Proposals: Accept, Negotiate or Argue?

A counter-proposal is not a court order and it is not automatically binding simply because it comes from a Credit Provider.

It is, however, information that the Debt Counsellor must consider seriously as part of the statutory obligation to pursue responsible debt rearrangement in good faith.

The three questions

When a counter-proposal is received, ask:

1. Is it legally competent?

Does it require terms that can lawfully be implemented? Does it rely on contractual terms, a concession or relief the court may grant?

2. Is it affordable?

A proposal that looks attractive to one Credit Provider may make the Consumer's overall plan impossible. The enquiry remains the Consumer's full financial means, prospects and obligations, not the isolated preference of a single creditor.

3. Is it reasonable in the context of the whole debt review?

Consider the remaining creditors, secured debt, payment term, interest, negative amortisation risk and the Consumer's household needs.

The Consumer's view matters, but the Debt Counsellor retains the statutory function

The Consumer should understand the counter-proposal and provide instructions about affordability and relevant factual circumstances. But the Debt Counsellor's recommendation is not merely a messenger service. The Debt Counsellor must exercise professional judgment and place a defensible recommendation before court.

When acceptance may be appropriate

Acceptance may be sensible where the counter-proposal:

· is affordable;

· resolves the opposition;

· is compatible with the remaining plan;

· does not create an unlawful preference or impossible payment structure; and

· can be properly incorporated into the court order.

When negotiation is preferable

Negotiate where the difference is capable of resolution through evidence or adjustment - for example a modest instalment gap, repayment term, treatment of arrears, or a disputed household expense.

Provide context. A Credit Provider is more likely to engage meaningfully where the Debt Counsellor explains why the proposed amount is the sustainable maximum rather than merely repeating the number.

When the issue should be argued

Legal argument may be necessary where the Credit Provider insists on:

· relief beyond what the NCA permits;

· exclusion of an account on a disputed legal basis;

· a factual allegation contradicted by reliable evidence;

· a household-budget position that ignores the statutory affordability enquiry; or

· a procedural point that cannot reasonably be resolved by agreement.

Good-faith negotiation has limits

Section 86(5)(b) requires good-faith participation, not indefinite negotiation. National Credit Regulator v Nedbank held that referral is appropriate where negotiations have concluded or there is no reasonable prospect of agreement. SA Taxi Impact Fund v Jacobs likewise cautions against equating failure to agree with bad faith.

Key authorities

· National Credit Act 34 of 2005: sections 78, 79, 86(5), 86(7) and 87.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

· Hattingh v FirstRand Bank Ltd[2017] ZANCHC 34.

· SA Taxi Impact Fund (RF) (Pty) Ltd v Jacobs [2024] ZAWCHC 278.

· SA Taxi Securitisation (Pty) Ltd v Lennard [2010] ZAECGHC 131.

Preparing a Replying Affidavit in an Opposed Debt Review Matter

A replying affidavit should answer the opposition. It should not become a second Founding Affidavit used to repair a case that was incomplete from the outset.

Why the distinction matters

In motion proceedings, affidavits function as both pleadings and evidence. The general rule is that an applicant must make out the case for relief in the founding papers. New matter may be permitted in reply only in exceptional circumstances and subject to fairness and prejudice.

The Supreme Court of Appeal restated this principle in Mostert and Others v FirstRand Bank t/a RMB Private Bank.

Correcting an error is not the same as hiding an error

If the opposition identifies a genuine mistake, say so and correct it transparently. Courts are more likely to trust a Debt Counsellor who explains an error than papers that attempt to avoid it.

But ask whether the correction changes the case materially. A fundamentally new affordability case, new cause for reckless credit relief or entirely new repayment proposal may require supplementary procedure and a fair opportunity for the Credit Provider to respond.

Evidence should be responsive

Useful replying evidence may include:

· updated payslips where income is challenged;

· bank statements explaining actual household expenditure;

· a Spousal Contribution Affidavit;

· proof of a child's school or medical expense;

· the correct COB or acceptance;

· proof that enforcement had or had not commenced; or

· calculations answering a negative-amortisation allegation.

The Debt Counsellor must own the affidavit

The attorney drafts the legal document, but the Debt Counsellor is the deponent. The Debt Counsellor should understand the allegations, check the factual foundation and ensure that the recommendation expressed in the affidavit remains his or her professional position.

Where facts belong to the Consumer's personal knowledge, obtain proper Consumer confirmation rather than converting the Debt Counsellor into a hearsay witness unnecessarily.

When a fourth set of affidavits may become relevant

If the reply properly contains material that the Credit Provider could not reasonably have anticipated, procedural fairness may require an opportunity to answer. That is a litigation decision and should be dealt with openly rather than by surprise at the hearing.

Key authorities

· Magistrates' Courts Rule 55.

· Mostert and Others v FirstRand Bank t/a RMB Private Bank (198/2017) [2018] ZASCA 54; 2018 (4) SA 443 (SCA).

· Shephard v Tuckers Land and Development Corporation (Pty) Ltd (1) 1978 (1) SA 173 (W).

· Director of Hospital Services v Mistry 1979 (1) SA 626 (A).

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

When a Credit Provider Seeks to Exclude an Account

An exclusion request should never be treated as a purely administrative instruction. Removing a credit agreement from the proposed debt rearrangement can materially change the Consumer's protection, budget and enforcement risk.

Why might exclusion be sought?

Common reasons include:

· the Credit Provider alleges that enforcement steps had already progressed before the section 86(1) application;

· the agreement is already subject to separate litigation;

· the account has been settled or transferred;

· the Credit Provider alleges that the agreement is not a qualifying credit agreement;

· the parties reach a separate settlement; or

· an error caused the wrong account to be included.

Section 86(2) is account-specific

Section 86(2) provides that a debt review application may not be made in respect of, and does not apply to, a particular credit agreement if the Credit Provider had already proceeded with the enforcement steps contemplated in section 130 at the time of the debt review application.

The chronology is therefore essential.

Obtain:

· the Form 16/date of application;

· section 129 notice;

· summons and proof of service;

· particulars of claim;

· any judgment or court order; and

· correspondence concerning exclusion.

Do not determine exclusion merely from the date printed on a summons.

Exclusion affects affordability

If a secured account is excluded but remains payable outside the rearrangement, the Consumer's household budget may need to make provision for it. A proposal that was affordable only because the excluded account was receiving a reduced debt-review instalment may no longer be viable.

Exclusion does not mean extinction

The debt remains. The excluded agreement is simply outside the debt rearrangement order unless another legal arrangement applies.

Settlement and exclusion

Where exclusion forms part of settlement of opposition, record precisely:

· which account is excluded;

· what payment is expected outside debt review;

· whether enforcement is suspended or withdrawn;

· whether there is a written settlement agreement; and

· how the remaining proposal is affected.

Relevant case law

Potpale Investments (Pty) Ltd v Zondi considered termination and enforcement in relation to an excluded agreement and illustrates why the procedural history of the particular account matters.

The broader section 86 jurisprudence, including Collettand the amended section 86(10), should be applied with care to the specific account rather than to the debt review globally.

The following should be discussed with an Attorney:

· the exclusion is based on disputed enforcement dates;

· the account is a vehicle or home loan;

· there is an existing summons or judgment;

· the Credit Provider seeks a concession affecting the rest of the proposal;

· the proposed exclusion will make the Consumer's budget unworkable; or

· the court has excluded an account without clarity as to the legal basis.

Key authorities

· National Credit Act 34 of 2005: sections 86(2), 86(10), 87, 88, 129 and 130.

· Potpale Investments (Pty) Ltd v Zondi (8843/21P) [2022] ZAKZPHC 41.

· Collett v FirstRand Bank Ltd and Another [2011] ZASCA 78 - read with the later amendment to section 86(10).

· SA Taxi Impact Fund (RF) (Pty) Ltd v Jacobs [2024] ZAWCHC 278.

Dismissed Debt Review Applications: What Happens Next?

A dismissal is not the same as a postponement, removal from the roll or administrative non-enrolment. It is a court order disposing of the application and must be treated as a legal event requiring immediate assessment.

Why dismissal is serious

Section 88(1)(b) provides that certain consequences of debt review cease where the court determines that the Consumer is not over-indebted or rejects the Debt Counsellor's proposal or the Consumer's application.

In Motor Finance Corporation v Herbert, a debt restructuring application had been dismissed for want of prosecution after the Consumer's representative failed to appear. The High Court treated the dismissal as bringing that debt review proceeding to an end unless the dismissal order was rescinded.

The lesson is that a dismissal cannot safely be treated as though the application is still pending.

First obtain the actual order

Establish:

· the exact wording of the order;

· whether reasons were given;

· whether the application was dismissed on the merits or for a procedural default;

· whether costs were ordered;

· whether any specific account was treated differently; and

· whether the order was made in the presence or absence of the applicant.

Possible next steps

The appropriate remedy may include:

· rescission of the dismissal order depending on the reasons for dismissal;

· appeal, where legally competent;

· correction of a patent error;

· a fresh process if legally permissible; or

· no further debt review litigation if the statutory route has genuinely ended.

The correct route depends on the order.

Payment and enforcement implications

The Debt Counsellor should urgently determine whether Credit Providers may now enforce and what the Consumer should pay while legal advice is obtained. Do not advise the Consumer that "nothing changes" merely because the PDA remains active.

Key authorities

· National Credit Act 34 of 2005: sections 87 and 88(1)(b).

· Magistrates' Courts Act 32 of 1944: section 36.

· Magistrates' Courts Rule 49.

· Motor Finance Corporation v Herbert(16098/2011) [2012] ZAWCHC 35.

· Phaladi v Lamara and Another(20480/2017 & 20481/2017) [2018] ZAWCHC 1.

Section 129 Notices and Summonses During Debt Review

A section 129 notice, summons and judgment are not the same thing. A Debt Counsellor should classify the document immediately because the Consumer's legal position may turn on dates.

Section 129 notice

Section 129 regulates the pre-enforcement process where a Consumer is in default. The notice generally draws the default to the Consumer's attention and precedes enforcement proceedings.

Receiving a section 129 notice while under debt review is an urgent warning, but it does not itself mean judgment has been granted.

Summons

A summons means that enforcement litigation has commenced or is being pursued. Obtain the complete summons, particulars of claim, service return and annexures.

The first legal questions usually include:

· When did the Consumer apply for debt review?

· When was the application filed in court?

· Was the particular agreement already excluded under section 86(2)?

· Was a section 86(10) termination notice sent?

· Has a debt rearrangement order already been granted?

· Is the Consumer in default under that order?

Pending debt review application

Current section 86(10)(b) prevents a Credit Provider from terminating a debt review application once it has already been filed in court or the Tribunal. This is different from the law considered in Collett, which preceded the amendment.

Granted order and default

Once an order has been granted, the enforcement analysis changes. Section 88(3)(b)(ii) permits enforcement when the Consumer defaults on an obligation under the rearrangement.

The Constitutional Court in Ferris v FirstRand Bank Ltdand the SCA in Jili v FirstRand Bank Ltd t/a Wesbank confirmed the serious consequences of breach of a debt rearrangement order. More recently, Absa Bank Ltd v Frans again dealt with enforcement following default.

Do not promise that debt review automatically stops the summons

The Debt Counsellor should not give litigation advice beyond the scope of the statutory role. The Consumer may require separate representation in the enforcement action. The Debt Counsellor’s mandate in the section 86 application does not mean that the Debt Counsellor represents the Consumer as defendant in a Credit Provider's summons.

Immediate checklist to evaluate summons

1. Date-stamp the document.

2. Obtain every page and annexure.

3. Capture date and method of service.

4. Identify the specific credit agreement.

5. Check the debt review chronology.

6. Check payment/default status.

7. Escalate for legal assessment the same day where litigation is live.

Key authorities

· National Credit Act 34 of 2005: sections 86(2), 86(10), 88(3), 129 and 130.

· Collett v FirstRand Bank Ltd and Another [2011] ZASCA 78 - historical section 86(10) position.

· Ferris and Another v FirstRand Bank Ltd and Another (CCT 52/13) [2013] ZACC 46; 2014 (3) SA 39 (CC).

· Jili v FirstRand Bank Ltd t/a Wesbank (763/2013) [2014] ZASCA 183; 2015 (3) SA 586 (SCA).

· Absa Bank Limited v Frans(2169/2024) [2025] ZAWCHC 154.

Vehicle Repossession Threats: A Debt Counsellor's Immediate Action Checklist

A Consumer who says "the repo agent is taking my car" may be describing very different legal situations. The Debt Counsellor's first task is to establish who is acting, under what authority and at what procedural stage.

Distinguish four scenarios

1. Collection or repossession agent requesting surrender.

This is not the same as a Sheriff executing a court order.

2. Voluntary surrender under section 127.

This is a formal statutory process initiated by the Consumer. A Consumer should understand the consequences before signing or handing over the asset.

3. Summons seeking cancellation and return.

Litigation is underway, but a summons is not itself a repossession order.

4. Sheriff acting under a court order or warrant.

This requires urgent legal assessment. The Consumer should not be advised to obstruct the Sheriff.

Judicial repossession versus self-help

A Credit Provider may have a contractual right to cancel an agreement after lawful default, but forcible repossession without surrender ordinarily requires judicial authority. The 2026 decision in ABSA Bank Limited v Masina expressly distinguished cancellation from repossession: cancellation can be a contractual election, while forcible recovery of the vehicle requires a court order where the Consumer does not surrender it.

Debt review does not provide permanent immunity

If the Consumer has breached a granted debt rearrangement order, section 88(3) may permit enforcement. Jili and Absa v Frans demonstrate the danger of treating the existence of a debt review order as a complete answer to repossession proceedings.

What the Debt Counsellor should obtain immediately

· all WhatsApp/SMS/email contact from the agent;

· name/company/contact details of the agent;

· Credit Provider and account number;

· section 129 notice, if any;

· summons and return of service;

· court order/warrant, if any;

· latest debt review order;

· PDA distribution history; and

· proof of the Consumer's payments.

What not to tell the Consumer

Avoid categorical statements such as:

· "They cannot take your car because you are under debt review";

· "Do not give the Sheriff the vehicle";

· "The summons is invalid"; or

· "Just catch up the arrears and everything goes back to normal."

Those conclusions require the file chronology and legal documents.

Key authorities

· National Credit Act 34 of 2005: sections 86, 88, 127, 129-131.

· Jili v FirstRand Bank Ltd t/a Wesbank [2014] ZASCA 183.

· Absa Bank Limited v Frans[2025] ZAWCHC 154.

· ABSA Bank Limited v Masina(2025/049787) [2026] ZAGPJHC 986.

· BMW Financial Services v Van Vuuren(2315/2024) [2026] ZANWHC 10 - section 127 voluntary surrender context.

After The Order

PART 3 - AFTER THE ORDER

Credit Provider Refuses to Implement the Court Order - What Now?

A granted debt review order should produce implementation, not a second negotiation about whether the Credit Provider wishes to comply.

Regulation 2(3) of the Debt Counselling Regulations requires the Debt Counsellor to collect the court order and deliver it to the affected Consumer and Credit Providers within five working days after issue. Regulation 2(4) requires the Credit Provider to implement the order within ten working days after receipt.

First establish whether the problem is implementation or interpretation

Common implementation problems include:

· the Credit Provider has not updated the instalment;

· payments continue to be allocated to the wrong account;

· the system does not reflect the court-ordered rate or concession;

· collection communication continues despite compliance; or

· the PDA and Credit Provider are using different account references.

An interpretation problem is different - for example, where the order contains ambiguous wording or a handwritten amendment.

The Debt Counsellor's first escalation pack

Send the Credit Provider:

· the full granted order;

· proof of delivery of the order;

· relevant account number;

· PDA statement/payment history;

· proof of the Consumer's compliance; and

· a concise explanation of the exact implementation failure.

Avoid sending a broad complaint without identifying the mismatch.

When the issue becomes legal

Refer for legal assessment where:

· the Credit Provider expressly refuses to recognise the order;

· enforcement is threatened despite compliance;

· the order cannot be interpreted consistently;

· the Credit Provider alleges that the account was not validly included;

· a summons/repossessive process has started; or

· repeated administrative escalation produces no correction and actual prejudice continues.

Do not vary a correct order to accommodate a system problem

If the order accurately records the relief granted and the problem is the Credit Provider's internal implementation, changing the judicial order may create more confusion. The remedy should address the source of the problem.

Key authorities

· Debt Counselling Regulations, 2012: regulation 2(3) and 2(4).

· National Credit Act 34 of 2005: sections 87 and 88.

· Granted court order itself - binding terms must be assessed on its wording.

PDA Allocation Error or Legal Problem? How to Tell the Difference

A payment problem is not automatically a litigation problem.

Before requesting a variation, rescission or attorney intervention, identify where the payment chain broke.

Step 1: What did the Consumer pay?

Confirm:

· amount paid;

· date paid;

· reference used; and

· whether the full required PDA amount was received.

Step 2: What instruction did the PDA have?

Check the payment instruction against the granted order and approved repayment schedule.

If the instruction itself is wrong, determine who issued it and whether it can be corrected without altering the court order.

Step 3: What did the PDA distribute?

Compare the actual distribution with the instruction.

A short or incorrect distribution caused by the PDA is an administrative issue unless it has triggered separate legal consequences requiring intervention.

Step 4: What did the Credit Provider allocate?

A Credit Provider may receive the correct amount but allocate it to the wrong account, suspense account or fee bucket. Obtain the Credit Provider statement and reconcile it against PDA proof.

Step 5: What does the court order actually require?

Only after the administrative chain has been reconciled should the Debt Counsellor ask whether the order itself is defective.

Why this distinction matters

Unnecessary variation applications:

· cost money;

· consume court time;

· delay resolution; and

· can introduce new drafting risk into an order that was originally correct.

Conversely, an actual defect in the order should not be repeatedly sent back to the PDA as though it were a capture problem.

The following should be discussed with an Attorney:

· the order and payment instruction cannot be reconciled;

· a payment discrepancy has triggered enforcement;

· the Credit Provider disputes the legal effect of the order;

· the order contains an ambiguous/materially wrong term; or

· administrative correction cannot remove the prejudice.

Key authorities

· National Credit Act 34 of 2005: sections 87 and 88.

· Debt Counselling Regulations, 2012: regulation 2.

· Magistrates' Courts Act 32 of 1944: section 36, where court-order correction/variation is genuinely implicated.

The Consumer Can No Longer Afford the Granted Order: What Are the Options?

This is one of the highest-risk situations in debt review. A Consumer who simply starts paying less than the court-ordered amount may trigger enforcement consequences under section 88(3).

Start before the default if possible

As soon as the Consumer reports retrenchment, reduced income, illness, divorce, new dependants or another material affordability problem, obtain updated evidence and reassess the household position.

Do not tell the Consumer simply to reduce the PDA payment while the order remains unchanged.

Why default matters

Section 88(3)(b)(ii) permits enforcement where a Consumer defaults on an obligation under a debt rearrangement order. Ferris, Jili and the 2025 decision in Absa Bank Ltd v Frans confirm that breach of a rearrangement order can materially alter the Consumer's protection.

Subsequently catching up does not necessarily reverse legal consequences that have already arisen.

Is variation possible?

Potentially, but not automatically.

Standard Bank v Daya NO is an example of a debt rearrangement order being varied in the Magistrates' Court. Current Rule 49 and section 36 of the Magistrates' Courts Act provide statutory mechanisms for rescission/variation in specified circumstances.

The existence of those powers does not mean every Consumer is entitled to a lower instalment whenever circumstances change. The proposed route, jurisdictional basis, evidence and effect on all Credit Providers must be assessed.

Practical assessment

Obtain:

· current income proof;

· evidence of the event causing the change;

· updated bank statements;

· revised household budget;

· full PDA/payment history;

· current Credit Provider balances where available;

· the granted order; and

· the proposed sustainable payment.

Then determine whether:

· the reduction is temporary or permanent;

· Credit Providers can agree to a solution;

· a court variation is legally appropriate; or

· another legal route is required.

Key authorities

· National Credit Act 34 of 2005: sections 87 and 88(3).

· Magistrates' Courts Act 32 of 1944: section 36.

· Magistrates' Courts Rule 49.

· Ferris and Another v FirstRand Bank Ltd and Another [2013] ZACC 46.

· Jili v FirstRand Bank Ltd t/a Wesbank [2014] ZASCA 183.

· Absa Bank Limited v Frans[2025] ZAWCHC 154.

· Standard Bank of South Africa v Daya NO and Others [2012] ZAECPEHC 33.

Rescission, Variation and Re-Enrolment - Understanding the Difference

These terms are often used interchangeably in operational conversations. They are not the same remedy.

Re-enrolment

Re-enrolment is primarily procedural. It places a matter that is still legally alive back on the court roll for hearing.

Typical examples include a matter removed from the roll, struck from the roll or postponed sine die where the underlying application has not been finally disposed of.

Re-enrolment cannot ordinarily revive an application that has been finally dismissed or withdrawn. The order must first be addressed through the appropriate legal remedy.

Rescission

Rescission seeks to set aside an existing judgment or order.

Section 36 of the Magistrates' Courts Act and Rule 49 regulate the Magistrates' Court's statutory rescission powers. The applicable ground and time period depend on the nature of the order and circumstances.

Variation

Variation changes an existing order rather than removing it entirely.

Examples may include correction of a material term or a legally competent amendment where good reason exists and the court has power to make it.

Rule 49(7) requires non-default variation/rescission applications to be brought on notice to the parties, supported by affidavit.

Correction of a patent error

Section 36 separately recognises the correction of patent errors in judgments in appropriate circumstances. A genuine clerical/patent error is different from asking the court to reconsider the merits of the order.

Key authorities

· Magistrates' Courts Act 32 of 1944: section 36.

· Magistrates' Courts Rule 49.

· Motor Finance Corporation v Herbert[2012] ZAWCHC 35.

· Jomane Eiendomme (Pty) Ltd v Magistrate Van Zyl and Another [2025] ZASCA 109.

· Standard Bank of South Africa v Daya NO and Others [2012] ZAECPEHC 33.

Legal & Regulatory Guidance

PART 4 - THE DIFFICULT LEGAL QUESTIONS

Reckless Credit Investigations: What Is the Debt Counsellor Actually Required to Investigate?

Reckless credit is not a slogan and it is not an automatic consequence of a Consumer being over-indebted today.

The enquiry is directed at the circumstances when the credit agreement was concluded or the approved credit was increased.

The statutory framework

Sections 80 and 81 of the NCA regulate reckless credit and the Credit Provider's pre-agreement assessment duties. Section 86(6)(b), in its current wording, requires the Debt Counsellor who accepts a debt review application to determine whether any of the Consumer's credit agreements appear to be reckless.

Regulation 24 contains the prescribed debt review assessment process and addresses the reckless-credit enquiry.

There is a drafting tension worth noting: the current section 86(6)(b) is framed broadly, while regulation 24(6) retains wording referring to the position "if the Consumer seeks a declaration of reckless credit". A prudent practice is therefore to screen the credit profile for indicators of potential recklessness and conduct a focused investigation where the facts warrant it.

What is the Debt Counsellor deciding?

The Debt Counsellor does not finally declare the agreement reckless. The statutory task is to determine whether it appears reckless and, where appropriate, recommend relief to the court under section 86(7)(c)(i). The court determines whether the statutory test is actually satisfied.

Focus on the time of grant

Ask what information was available or should have been assessed when the agreement was made:

· income at the time;

· existing credit obligations;

· declared living expenses;

· bureau information;

· affordability calculation;

· purpose of the credit where relevant; and

· whether the Consumer understood the costs, risks and obligations where that issue is raised.

Current hardship does not retrospectively prove reckless credit.

Do not infer recklessness from missing documents

If a Credit Provider cannot or will not produce historical records, that may create an evidential difficulty. It is not proof that no affordability assessment occurred.

FirstRand Bank Ltd v Nel and Others overturned a reckless-credit finding where there was no evidence establishing the statutory breach at the time the loans were advanced.

The request for records should be targeted

Section 86(5) requires the Consumer and affected Credit Providers to comply with reasonable requests facilitating the assessment and to participate in good faith.

A request should identify:

· the agreement;

· the suspected statutory issue;

· the documents required; and

· why each document is relevant.

A broad demand for an entire historical file is more vulnerable to resistance and may not advance the actual enquiry.

Key authorities

· National Credit Act 34 of 2005: sections 78-83 and 86(5)-(7).

· National Credit Regulations, 2006: regulation 24 and affordability-assessment provisions applicable to the date of grant.

· FirstRand Bank Ltd v Nel and Others(A58/2020) [2021] ZAMPMBHC 47.

· Nedbank Limited v Lehasa(967/2025) [2026] ZAFSHC 75.

· Summit Financial Partners (Pty) Ltd v Direct Axis SA (Pty) Ltd and Others [2022] ZANCT 69.

Section 166 and Credit Providers Refusing Historical Documents

A recurring response to reckless-credit enquiries is that more than three years have passed and section 166 of the NCA therefore entitles the Credit Provider to refuse the documents.

That proposition is too broad.

What section 166 actually regulates

Section 166 is a limitation on making or referring a complaintunder the NCA to the National Consumer Tribunal or a consumer court after the statutory period. It is not drafted as a general evidential privilege and does not say that records cease to exist or may never be requested after three years.

Separate three issues

1. Tribunal/consumer-court complaint jurisdiction

Section 166 can bar a complaint in the prescribed forum after the time limit. Tribunal authority has treated the bar strictly in the complaint context.

2. The Debt Counsellor's section 86 assessment

Sections 86(5) and 86(6), read with regulation 24, create the Debt Counsellor's statutory assessment function. A targeted request for information relevant to that assessment is conceptually distinct from filing a complaint at the Tribunal.

3. Reckless credit as an issue in ordinary court proceedings

Section 83(1) allows a court or Tribunal considering a credit agreement to declare it reckless where the statutory requirements are met. The 2026 decision in Nedbank Ltd v Lehasa held that section 166 did not bar a properly raised reckless-credit defence in ordinary court enforcement proceedings.

The forum and route therefore matter.

Record retention is a separate question

Sections 170 and regulations 55 and 56 regulate record retention. A Credit Provider should distinguish:

· "the minimum retention period has expired and the record no longer exists"; from

· "the record exists, but we refuse to provide it because of section 166".

Those are not the same answer.

What should the Debt Counsellor do after refusal?

1. Preserve the request and refusal.

2. Ask whether the records exist.

3. Identify the legal basis for refusal.

4. Complete the statutory assessment on the best reasonably available evidence.

5. Do not treat refusal as proof of reckless credit.

6. Record the evidential limitation and the conclusion reached.

7. If later enforcement proceedings arise, ensure the Consumer obtains legal advice about whether reckless credit can properly be pleaded and how records may be obtained through litigation procedures.

PAIA is not a substitute for the Debt Counsellor's statutory process

A Consumer may in appropriate circumstances make a request under the Promotion of Access to Information Act 2 of 2000 before litigation, but access is not automatic and PAIA does not require creation of records that do not exist. Once litigation starts, section 7 of PAIA may also become relevant and ordinary court discovery processes should be considered.

Key authorities

· National Credit Act 34 of 2005: sections 80-83, 86, 136-141, 166 and 170.

· National Credit Regulations: regulations 24, 55 and 56.

· Nedbank Limited v Lehasa(967/2025) [2026] ZAFSHC 75.

· FirstRand Bank Ltd v Nel and Others[2021] ZAMPMBHC 47.

· Summit Financial Partners (Pty) Ltd v Direct Axis SA (Pty) Ltd and Others [2022] ZANCT 69.

· Promotion of Access to Information Act 2 of 2000: particularly section 7 in the litigation context.

What Evidence Is Enough to Raise Reckless Credit?

A suspicion is enough to investigate. It is not enough to obtain a court declaration.

The Debt Counsellor should distinguish three thresholds:

1. an indicator that justifies enquiry;

2. evidence supporting a conclusion that the agreement appearsreckless for purposes of the recommendation; and

3. evidence sufficient for the court to declare the agreement reckless under sections 80 and 83.

Start with the statutory category

Section 80 recognises different forms of reckless credit. The evidence needed depends on the alleged contravention. A case based on failure to conduct any assessment is different from a case alleging that an assessment was performed but the resulting credit nevertheless made the Consumer over-indebted.

Contemporaneous evidence is critical

Because recklessness is assessed at the time of grant/increase, the strongest evidence is usually contemporaneous:

· credit application;

· payslips/income evidence submitted then;

· affordability assessment;

· bureau report at grant;

· declared expenses and obligations;

· bank statements from the relevant period;

· quotation/pre-agreement statement;

· the credit agreement; and

· evidence of the Consumer's existing obligations at that time.

Consumer recollection must be tested

A Consumer saying "they never checked anything" is relevant but should be tested against documentary and objective evidence. Ask what documents were provided, how the application was made and what income/expenses were declared.

Missing documents do not reverse the onus

FirstRand Bank Ltd v Nel and Others is particularly important. The High Court held that the reckless-credit declaration lacked a proper evidential foundation where there was no evidence showing that the statutory assessment duties had not been complied with when the loans were advanced.

Key authorities

· National Credit Act 34 of 2005: sections 78-83 and 86(6)-(7).

· National Credit Regulations: regulation 24 and the affordability-assessment regime applicable at the relevant date.

· FirstRand Bank Ltd v Nel and Others[2021] ZAMPMBHC 47.

· Nedbank Limited v Lehasa[2026] ZAFSHC 75.

· Summit Financial Partners (Pty) Ltd v Direct Axis SA (Pty) Ltd and Others [2022] ZANCT 69.

The Debt Counsellor as a Neutral Functionary: What Does That Mean in Practice?

The Debt Counsellor's role is frequently misunderstood. The Debt Counsellor is engaged by the Consumer through the statutory debt review process, but is not simply the Consumer's partisan representative.

The leading authority

In National Credit Regulator v Nedbank Limited and Others, the High Court described the Debt Counsellor as a neutral functionary who does not seek to advance any particular party's cause. The court also held that the Debt Counsellor has a duty to assist the Magistrate by furnishing evidence, making submissions regarding the proposal and answering questions.

Neutral does not mean passive

Neutrality requires independent statutory judgment.

The Debt Counsellor should:

· verify the Consumer's financial information;

· make a genuine section 86(6) determination;

· propose an arrangement that can be justified;

· consider Credit Provider responses in good faith;

· correct errors when identified;

· explain the Consumer's circumstances accurately; and

· be prepared to defend a reasonable recommendation before court.

Neutral does not mean equal outcomes

The NCA's purpose includes relief of over-indebtedness through responsible debt rearrangement. A neutral Debt Counsellor may therefore recommend a substantial reduction in monthly payments where the evidence and statute justify it. Neutrality concerns the integrity of the process, not mathematical equality between parties.

The Debt Counsellor must not simply execute instructions

Examples of impermissible or risky conduct include:

· signing an affidavit containing facts the Debt Counsellor knows are inaccurate;

· recommending a legally incompetent interest reduction as though the court can impose it;

· excluding a spouse or creditor merely because it makes the application easier;

· alleging reckless credit without evidence; or

· presenting a Consumer budget that has not been properly verified.

Relationship with the attorney

VDH represents the Debt Counsellor in the court application. The attorney can advise on law, evidence and procedure, but the statutory assessment and recommendation remain the Debt Counsellor's professional responsibility.

The best litigation relationship therefore involves constructive challenge in both directions: VDH identifies legal/evidential weaknesses; the Debt Counsellor provides the factual/statutory foundation and gives informed instructions.

Key authorities

· National Credit Act 34 of 2005: sections 86 and 87.

· National Credit Regulator v Nedbank Limited and Others [2009] ZAGPPHC 100.

· Bornman v National Credit Regulator(798/12) [2013] ZASCA 130; 2014 (3) SA 384 (SCA).

· Driskel v Maseko and Others[2017] ZAFSHC 150.

Can a Consumer Withdraw From Debt Review?

The word "withdraw" is dangerous because it is often used to describe several legally different situations.

A Consumer cannot necessarily end a statutory debt review simply by sending an email saying "I cancel".

Debt review is a statutory process

The NCA creates specific consequences once a Consumer applies under section 86(1). The Act then provides statutory routes by which those consequences may end, including rejection/not-over-indebted outcomes, court determination and clearance.

The older voluntary withdrawal process was displaced

The NCR's Withdrawal Guidelines 002/2015 were issued after case law rejected the idea that a Debt Counsellor has a free-standing power to terminate debt review simply because the Consumer wishes to leave.

The Guidelines themselves caution that later legislation and case law supersede them.

Before a debt rearrangement order

The legal position depends on the stage reached and the statutory status of the matter. Phaladi v Lamara is an important discussion of the statutory nature of debt review and the limited circumstances in which the consequences may fall away.

Operational labels such as "cancelled" or "inactive" do not themselves determine the legal position.

After a debt rearrangement order

The position is considerably stricter.

In Van Vuuren v Roets and Others, the High Court held that there is no free-standing power simply to release a Consumer from a granted debt review order merely because the Consumer's circumstances have improved. The statutory clearance framework and the binding court order must be respected.

What a Debt Counsellor should establish

When a Consumer asks to "cancel debt review", determine:

· Was a valid section 86(1) application made?

· Has a section 86(6) determination been made?

· Has Form 17.2 been issued?

· Has a court application been filed?

· Has an order been granted?

· Are all short-term rearranged obligations paid up?

· Is a home loan still outstanding?

· Is the Consumer asking for withdrawal, a not-over-indebted determination, rescission, variation or clearance?

Only then can the correct legal route be identified.

Key authorities

· National Credit Act 34 of 2005: sections 71, 86 and 88.

· NCR Withdrawal from Debt Review Guidelines 002/2015 - subject to subsequent law.

· Phaladi v Lamara and Another[2018] ZAWCHC 1; 2018 (3) SA 265 (WCC).

· Van Vuuren v Roets and Others(37407/2018) [2019] ZAGPJHC 286; 2019 (6) SA 506 (GJ).

Non-Joinder in Debt Review Applications

Non-joinder is not a technical objection to be brushed aside. If a person has a direct and substantial legal interest that may be prejudicially affected by the order, the court should ordinarily not determine that person's rights in their absence.

The general test

The Supreme Court of Appeal has repeatedly stated that joinder is required where a person has a direct and substantial interest in the subject matter and may be prejudicially affected by the judgment.

Recent SCA authority continues to apply the formulation in Judicial Service Commission v Cape Bar Council and Amalgamated Engineering Union v Minister of Labour.

Why this matters in debt review

A debt review order changes enforceable repayment obligations. Potential joinder issues therefore arise where:

· a spouse is married in community of property;

· a joint debtor or co-borrower is affected;

· an agreement has been ceded and the correct Credit Provider is unclear;

· an account is jointly held; or

· relief is sought that would bind a party who has not received notice.

Marriage in community of property

The Matrimonial Property Act recognises the joint estate and regulates litigation by and against spouses. The 2026 decision in Shackleton Credit Management v Deolall confirms, in a credit context, the legal significance of both spouses where the debt is recoverable from the joint estate.

In debt review, the practical risk is obvious: an order restructuring liabilities of a joint estate should not be constructed around only one spouse where the other spouse's legal interest is directly affected.

Cure early, not at court

If non-joinder is identified before issue, correct the parties and evidence then.

If identified after issue but before hearing, obtain legal advice on amendment, service and supplementary evidence.

If raised at court unexpectedly, do not concede dismissal reflexively. Depending on the circumstances, a postponement and joinder may cure the defect. The remedy is procedural and fact-specific.

Key authorities

· Matrimonial Property Act 88 of 1984: section 17.

· Judicial Service Commission v Cape Bar Council 2013 (1) SA 170 (SCA).

· Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A).

· Shackleton Credit Management (Pty) Ltd v Deolall and Another (705/2022) [2026] ZANWHC 153.

· Absa Bank Ltd v Naude NO and Others- direct and substantial interest test as applied by the SCA.

When a Consumer's Circumstances Change After the Proposal Has Been Prepared

A proposal is based on facts. When the facts materially change, the Debt Counsellor must decide whether the proposal remains a responsible recommendation.

Material changes include

· loss of employment;

· salary reduction or significant increase;

· illness or disability;

· maternity/parental leave;

· new dependants;

· divorce or separation;

· relocation and changed housing costs;

· a paid-up account;

· enforcement/exclusion of an account; or

· a new unavoidable household expense.

Before the court order is granted

Section 87 requires the Magistrate to consider the Consumer's financial means, prospects and obligations. If the Debt Counsellor knows that the financial picture in the Founding Affidavit is materially outdated, simply proceeding on the old facts may undermine the application.

Obtain updated evidence and determine whether:

· the proposal still works;

· a proposal amendment is required;

· Credit Providers must receive the revised proposal;

· a supplementary affidavit is necessary; and

· the Consumer's Confirmatory Affidavit must be updated.

Do not confuse a small fluctuation with a new case

Not every salary change requires the application to start again. The question is materiality: does the change affect over-indebtedness, the reasonable household budget or the amount available for distribution?

If the change arises after opposition

Be careful about introducing an entirely new case in reply. In motion proceedings the founding papers must ordinarily contain the case for relief. Where circumstances genuinely changed later, disclose the chronology and use the appropriate supplementary procedure rather than pretending the facts existed at launch.

Mostert v FirstRand Bank is useful on the limits of new matter in reply.

If the order has already been granted

A post-order affordability change is a different problem. The existing court order remains binding until lawfully changed. Refer to the separate guidance on variation and default before advising a reduced payment.

The correct question is not "must we redo everything?" It is:

"What fact has changed, what part of the assessment does it affect, and what procedural step is necessary to ensure the court receives an accurate case without unfair prejudice to another party?"

Key authorities

· National Credit Act 34 of 2005: sections 78, 79, 86 and 87.

· National Credit Regulations: regulation 24.

· Debt Counselling Regulations, 2012: regulation 2.

· Driskel v Maseko and Others[2017] ZAFSHC 150.

· Mostert and Others v FirstRand Bank t/a RMB Private Bank [2018] ZASCA 54.