Papers by Hermie Coetzee
Personal credit extension in South Africa has more than quadrupled in the past five years, rising... more Personal credit extension in South Africa has more than quadrupled in the past five years, rising from R289.8 billion to R1.1 trillion in 2008! Of the 17.14 million credit-active consumers, 6.59 million (38.44%) had an impaired credit record at the end of March 2008. The latest available statistics from Statistics South Africa show that in July 2008 alone, 112 942 summonses for debt were issued and 58 962 judgements were granted, compared to 109 259 summonses and 57 306 judgements in the preceding month. These figures all point to over-indebtedness, which can be defined as the inability of a consumer to meet his financial obligations in a timeous manner. Over-indebtedness often causes stress and depression – something which has serious implications for both the employee and the employer. Absenteeism, stress-related illnesses, pilfering, theft, violence, family problems, reckless gambling, alcohol abuse, unfounded demands for pay increases, resignation from employment in order to obtain access to pensions, etc are some of the possible consequences of over-indebtedness.
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Personal credit extension has more than doubled in the last five years
exceeding R1 trillion in 2... more Personal credit extension has more than doubled in the last five years
exceeding R1 trillion in 2008. There were 16.9 million credit active consumers
at the end of September 2007. Of these, 6.38 million or 37.7% had an
impaired credit record. In May 2008 alone, 105 427 summonses were issued
for debt and 54 755 judgments granted.
Over-indebtedness and the causes thereof have become an increasingly important social challenge to individuals employed in both the private and public sectors. The National Credit Act plays a major part in ensuring that responsible credit be extended in future and further provides a remedy in the form of Debt Review (or commonly know as Debt Counselling) in the event that a consumer finds him / herself to be over-extended. However, Debt Review in terms of the National Credit Act only pertains to credit agreements (not all debts) and then only where no legal action has commenced. Anecdotal evidence and complaints regarding the irregularities in the obtaining, serving and applying of emoluments attachment orders and thus the exploitation of debtors abound. A research team of the Law Clinic of the University of Pretoria commissioned by BE @ UP in terms of an agreement with GTZ, conducted investigative research into the incidence of garnishee orders in South Africa, focusing on undesirable processes, practices and possible remedies.
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The National Credit Act 34 of 2005 (hereinafter the “NCA” or “Act”) is an innovative but challeng... more The National Credit Act 34 of 2005 (hereinafter the “NCA” or “Act”) is an innovative but challenging piece of legislation. It provides for various novel approaches to debt enforcement in respect of credit agreements and has introduced debt-relief measures in respect of over-indebtedness and reckless credit that are new to South African consumer credit legislation. It is thus inevitable that in applying the provisions of the Act various issues will arise that will require interpretation and, therefore, intense scrutiny. In the recent judgment of BMW Financial Services (SA) (Pty) Ltd v Donkin, Wallis J was required to scrutinize various aspects relating to debt review and debt enforcement in order to decide the consumer’s fate as influenced by the NCA (66; and see also s 130(1)(a)).
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The National Credit Act 34 of 2005 (the NCA)
aims to address and prevent the overindebtedness
of ... more The National Credit Act 34 of 2005 (the NCA)
aims to address and prevent the overindebtedness
of consumers and to provide mechanisms for resolving overindebtedness based on the principle of satisfaction by the consumer of all responsible obligations. In this regard it provides inter alia for the mechanism of debt review during which a debt counsellor reviews the debt situation of a consumer in order to determine if the consumer is over-indebted and to attempt to assist the consumer in obtaining debt relief in the form of a consensual debt re-arrangement agreement or court-ordered debt re-structuring. During this process the consumer and credit providers concerned are obliged to comply with any reasonable requests by the debt
counsellor to facilitate the evaluation of the consumer's state of indebtedness and the prospects of responsible debt re-arrangement, and to participate in good faith in
the review and any negotiations designed to result in responsible debt rearrangement.
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OPSOMMING Kan die National Credit Act 34 van 2005 deur ooreenkoms tussen die partye van toepassin... more OPSOMMING Kan die National Credit Act 34 van 2005 deur ooreenkoms tussen die partye van toepassing gemaak word op 'n kredietooreenkoms wat buite die toepassingsgebied van die Wet val? Die artikel handel oor die vraag of die National Credit Act 34 van 2005 (die Wet) by wyse van wilsooreenstemming deur die partye tot 'n kredietooreenkoms op hulle ooreenkoms van toepassing gemaak kan word onder omstandighede waar die Wet, volgens die bepa-lings daarvan, nie op die ooreenkoms van toepassing is nie. Die vraag is tersaaklik in die lig van teenstrydige hofbeslissings in dié verband. Die vraag word ondersoek aan die hand van die toepassing van die Wet op borgooreenkomste, die uitsluiting van sommige regs-persoon-verbruikers van die toepassingsveld van die Wet, die doelstellings van die Wet en die belang van laasgenoemde wanneer die Wet uitgelê word, asook 'n opsomming en be-spreking van gemelde beslissings. Daar word tot die gevolgtrekking gekom dat die onderhawige vraag bevestigend beantwoord moet word onderhewig daaraan dat daar van die beginsels van inlywing deur inkorporasie gebruik gemaak word.
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International Insolvency Review, Jan 18, 2016
The South African natural person insolvency system has remained largely creditor-orientated and e... more The South African natural person insolvency system has remained largely creditor-orientated and excludes many honest but unfortunate debtors from its ambit. This is despite the worldwide trend to accommodate all such debtors. Although the system does provide for three different statutory natural person debt relief procedures, the cumulative effect of these measures' entry requirements results in differentiation on financial grounds. This is as all statutory measures require the debtor to have some form of disposable assets or income available – thereby drawing a distinction between those debtors with and those without assets and or income (the so-called no income no asset debtors). The main aim of this article is to measure the South African natural person insolvency system against the right to equality in terms of both the South African Constitution and the Promotion of Equality and Prevention of Unfair Discrimination Act. The article may benefit legislatures and policymakers in constitutional jurisdictions that subscribe to the equality principle and that directly or indirectly exclude some debtors from debt relief while providing others therewith. Copyright © 2016 INSOL International and John Wiley & Sons, Ltd.
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Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad, 2011
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Section 129(1)(a) read with section 130(1) and 130(3) of the National Credit Act 34 of 2005 (the ... more Section 129(1)(a) read with section 130(1) and 130(3) of the National Credit Act 34 of 2005 (the NCA) provides that, as a required procedure before debt enforcement, a credit provider must draw the default to the consumer's notice in writing and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date. Even though section 129(1)(a) is silent as to the method by which the default should be brought to the consumer's notice, section 130(1)(a) provides clarity by requiring the section 129(1)(a) notice to be delivered. It appears that a credit provider who fails to comply with the provisions of section 129(1)(a) prior to debt enforcement by means of litigation will be in a procedural predicament as the credit provider will not p...
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Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad, 2010
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International Insolvency Review, Jul 2013
South African natural person insolvency law has remained largely creditor-orientated despite the ... more South African natural person insolvency law has remained largely creditor-orientated despite the international trend to assist over-indebted debtors. Furthermore, although the South African system provides for a number of debt relief procedures, the entry requirements are of such a nature that most debtors are effectively excluded from any form of relief and therefore bound to their desperate situations. The majority of these excluded debtors fall within the no income and no assets (the so-called No Income No Asset (NINA) debtors) category-the main feature of this article. In the South African insolvency system, a person can therefore be ‘too poor to go bankrupt’. With reference to international principles and a thorough comparative study of the New Zealand system, the South African system is analysed, and some recommendations are made in order to provide a more accessible, effective and nondiscriminate system with specific focus on the plight of the NINA debtor. This is done by keeping the complex South African debt and poverty situation in mind as it is acknowledged that any reform should take cognisance of the unique socio-economic and cultural background. It is recognised that providing relief to the NINA category debtors will have an impact on the economy. However, it is submitted that the exclusion of this group will be even more expensive as it creates an obstacle for these debtors to enter the formal sector and economy, thereby discouraging broader economic growth. Copyright © 2013 INSOL International and John Wiley & Sons, Ltd.
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Thesis Chapters by Hermie Coetzee
The purpose of this thesis is to do a comparative reappraisal of debt relief measures
available t... more The purpose of this thesis is to do a comparative reappraisal of debt relief measures
available to natural person debtors in the South African insolvency law. Although the
broader South African natural person insolvency system currently includes three
statutory debt relief procedures, namely, the sequestration procedure regulated by
the Insolvency Act 24 of 1936, the administration order procedure in terms of the
Magistrates’ Courts Act 32 of 1944 and the debt review procedure found in the
National Credit Act 34 of 2005, not all natural person debtors have access to the
system. The majority of this marginalised group are debtors with no income and no
assets (the so-called No Income No Asset (NINA) debtors). Also, only one measure
provides real debt relief in the form of a statutory discharge of debt. Furthermore, the
existing measures have developed in a haphazard fashion which has led to a
multiplicity of procedures, regulators and forums that resulted in ineffectiveness,
inequality and uncertainty. The larger system therefore lacks proper policy
considerations.
This thesis provides the reasons for reform by, amongst others, arguing that the
present situation is unconstitutional as it unreasonably and unfairly discriminates
against the NINA group of debtors in particular. It measures the broader South
African system against internationally accepted principles of efficient and effective
natural person insolvency regimes. In this regard it is found that the system as a
whole is seriously deficient. With reference to international principles and guidelines
as well as suitable attributes found in foreign jurisdictions, the thesis concludes with
suggestions for real law reform. Both substantive and procedural recommendations
are made.
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Articles accepted for publication by Hermie Coetzee
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Papers by Hermie Coetzee
exceeding R1 trillion in 2008. There were 16.9 million credit active consumers
at the end of September 2007. Of these, 6.38 million or 37.7% had an
impaired credit record. In May 2008 alone, 105 427 summonses were issued
for debt and 54 755 judgments granted.
Over-indebtedness and the causes thereof have become an increasingly important social challenge to individuals employed in both the private and public sectors. The National Credit Act plays a major part in ensuring that responsible credit be extended in future and further provides a remedy in the form of Debt Review (or commonly know as Debt Counselling) in the event that a consumer finds him / herself to be over-extended. However, Debt Review in terms of the National Credit Act only pertains to credit agreements (not all debts) and then only where no legal action has commenced. Anecdotal evidence and complaints regarding the irregularities in the obtaining, serving and applying of emoluments attachment orders and thus the exploitation of debtors abound. A research team of the Law Clinic of the University of Pretoria commissioned by BE @ UP in terms of an agreement with GTZ, conducted investigative research into the incidence of garnishee orders in South Africa, focusing on undesirable processes, practices and possible remedies.
aims to address and prevent the overindebtedness
of consumers and to provide mechanisms for resolving overindebtedness based on the principle of satisfaction by the consumer of all responsible obligations. In this regard it provides inter alia for the mechanism of debt review during which a debt counsellor reviews the debt situation of a consumer in order to determine if the consumer is over-indebted and to attempt to assist the consumer in obtaining debt relief in the form of a consensual debt re-arrangement agreement or court-ordered debt re-structuring. During this process the consumer and credit providers concerned are obliged to comply with any reasonable requests by the debt
counsellor to facilitate the evaluation of the consumer's state of indebtedness and the prospects of responsible debt re-arrangement, and to participate in good faith in
the review and any negotiations designed to result in responsible debt rearrangement.
Thesis Chapters by Hermie Coetzee
available to natural person debtors in the South African insolvency law. Although the
broader South African natural person insolvency system currently includes three
statutory debt relief procedures, namely, the sequestration procedure regulated by
the Insolvency Act 24 of 1936, the administration order procedure in terms of the
Magistrates’ Courts Act 32 of 1944 and the debt review procedure found in the
National Credit Act 34 of 2005, not all natural person debtors have access to the
system. The majority of this marginalised group are debtors with no income and no
assets (the so-called No Income No Asset (NINA) debtors). Also, only one measure
provides real debt relief in the form of a statutory discharge of debt. Furthermore, the
existing measures have developed in a haphazard fashion which has led to a
multiplicity of procedures, regulators and forums that resulted in ineffectiveness,
inequality and uncertainty. The larger system therefore lacks proper policy
considerations.
This thesis provides the reasons for reform by, amongst others, arguing that the
present situation is unconstitutional as it unreasonably and unfairly discriminates
against the NINA group of debtors in particular. It measures the broader South
African system against internationally accepted principles of efficient and effective
natural person insolvency regimes. In this regard it is found that the system as a
whole is seriously deficient. With reference to international principles and guidelines
as well as suitable attributes found in foreign jurisdictions, the thesis concludes with
suggestions for real law reform. Both substantive and procedural recommendations
are made.
Articles accepted for publication by Hermie Coetzee
exceeding R1 trillion in 2008. There were 16.9 million credit active consumers
at the end of September 2007. Of these, 6.38 million or 37.7% had an
impaired credit record. In May 2008 alone, 105 427 summonses were issued
for debt and 54 755 judgments granted.
Over-indebtedness and the causes thereof have become an increasingly important social challenge to individuals employed in both the private and public sectors. The National Credit Act plays a major part in ensuring that responsible credit be extended in future and further provides a remedy in the form of Debt Review (or commonly know as Debt Counselling) in the event that a consumer finds him / herself to be over-extended. However, Debt Review in terms of the National Credit Act only pertains to credit agreements (not all debts) and then only where no legal action has commenced. Anecdotal evidence and complaints regarding the irregularities in the obtaining, serving and applying of emoluments attachment orders and thus the exploitation of debtors abound. A research team of the Law Clinic of the University of Pretoria commissioned by BE @ UP in terms of an agreement with GTZ, conducted investigative research into the incidence of garnishee orders in South Africa, focusing on undesirable processes, practices and possible remedies.
aims to address and prevent the overindebtedness
of consumers and to provide mechanisms for resolving overindebtedness based on the principle of satisfaction by the consumer of all responsible obligations. In this regard it provides inter alia for the mechanism of debt review during which a debt counsellor reviews the debt situation of a consumer in order to determine if the consumer is over-indebted and to attempt to assist the consumer in obtaining debt relief in the form of a consensual debt re-arrangement agreement or court-ordered debt re-structuring. During this process the consumer and credit providers concerned are obliged to comply with any reasonable requests by the debt
counsellor to facilitate the evaluation of the consumer's state of indebtedness and the prospects of responsible debt re-arrangement, and to participate in good faith in
the review and any negotiations designed to result in responsible debt rearrangement.
available to natural person debtors in the South African insolvency law. Although the
broader South African natural person insolvency system currently includes three
statutory debt relief procedures, namely, the sequestration procedure regulated by
the Insolvency Act 24 of 1936, the administration order procedure in terms of the
Magistrates’ Courts Act 32 of 1944 and the debt review procedure found in the
National Credit Act 34 of 2005, not all natural person debtors have access to the
system. The majority of this marginalised group are debtors with no income and no
assets (the so-called No Income No Asset (NINA) debtors). Also, only one measure
provides real debt relief in the form of a statutory discharge of debt. Furthermore, the
existing measures have developed in a haphazard fashion which has led to a
multiplicity of procedures, regulators and forums that resulted in ineffectiveness,
inequality and uncertainty. The larger system therefore lacks proper policy
considerations.
This thesis provides the reasons for reform by, amongst others, arguing that the
present situation is unconstitutional as it unreasonably and unfairly discriminates
against the NINA group of debtors in particular. It measures the broader South
African system against internationally accepted principles of efficient and effective
natural person insolvency regimes. In this regard it is found that the system as a
whole is seriously deficient. With reference to international principles and guidelines
as well as suitable attributes found in foreign jurisdictions, the thesis concludes with
suggestions for real law reform. Both substantive and procedural recommendations
are made.