National Credit Act, 2005 (Act No. 34 of 2005)
Chapter 6 : Collection, Repayment, Surrender and Debt Enforcement
Part C : Debt enforcement by repossession or judgment

129. Required procedures before debt enforcement

1)        If the consumer is in default under a credit agreement, the credit provider-

a)        may draw the default to the notice of the consumer 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; and

b)        subject to section 130(2), may not commence any legal proceedings to enforce the agreement before-

i)          first providing notice to the consumer, as contemplated in paragraph (a), or in section 86(10), as the case may be; and

ii)         meeting any further requirements set out in section 130.

2)        Subsection (1) does not apply to a credit agreement that is subject to a debt restructuring order, or to proceedings in a court that could result in such an order.

3)        Subject to subsection (4), a consumer may-

a)        at any time before the credit provider has cancelled the agreement re-instate a credit agreement that is in default by paying to the credit provider all amounts that are overdue, together with the credit provider’s permitted default charges and reasonable costs of enforcing the agreement up to the time of re-instatement; and-

b)        after complying with paragraph (a), may resume possession of any property that had been repossessed by the credit provider pursuant to an attachment order.

4)        A consumer may not re-instate a credit agreement after-

a)        the sale of any property pursuant to-

i)          an attachment order; or

ii)         surrender of property in terms of section 127;

b)        the execution of any other court order enforcing that agreement; or

c)        the termination thereof in accordance with section 123.

130. Debt procedures in a Court

1)        Subject to subsection (2), a credit provider may approach the court for an order to enforce a credit agreement only if, at that time, the consumer is in default and has been in default under that credit agreement for at least 20 business days and-

a)        at least 10 business days have elapsed since the credit provider delivered a notice to the consumer as contemplated in section 86(9), or section 129(1), as the case may be;

b)        in the case of a notice contemplated in section 129(1), the consumer has-

i)          not responded to that notice; or

ii)         responded to the notice by rejecting the credit provider’s proposals; and

c)        in the case of an instalment agreement, secured loan, or lease, the consumer has not surrendered the relevant property to the credit provider as contemplated in section 127.

2)        In addition to the circumstances contemplated in subsection (1), in the case of an instalment agreement, secured loan, or lease, a credit provider may approach the court for an order enforcing the remaining obligations of a consumer under a credit agreement at any time if-

a)        all relevant property has been sold pursuant to-

i)          an attachment order; or

ii)         surrender of property in terms of section 127; and

b)        the net proceeds of sale were insufficient to discharge all the consumer’s financial obligations under theagreement.

3)        Despite any provision of law or contract to the contrary, in any proceedings commenced in a court in respect of a credit agreement to which this Act applies, the court may determine the matter only if the court is satisfied that-

a)        in the case of proceedings to which sections 127, 129 or 131 apply, the procedures required by those sections have been complied with;

b)        there is no matter arising under that credit agreement, and pending before the Tribunal, that could result in an order affecting the issues to be determined by the court; and

c)        that the credit provider has not approached the court-

i)          during the time that the matter was before a debt counsellor, alternative dispute resolution agent,consumer court or the ombud with jurisdiction;

or

ii)         despite the consumer having-

aa)      surrendered property to the credit provider, and before that property has been sold;

bb)      agreed to a proposal made in terms of section 129(1)(a) and acted in good faith in fulfilment of that agreement;

cc)      complied with an agreed plan as contemplated in section 129(1)(a); or

dd)      brought the payments under the credit agreement up to date, as contemplated in section 129(1)(a).

4)        In any proceedings contemplated in this section, if the court determines that-

a)        the credit agreement was reckless as described in section 80, the court must make an order contemplated insection 83;

b)        the credit provider has not complied with the relevant provisions of this Act, as contemplated in subsection (3)(a), or has approached the court in circumstances contemplated in subsection (3)(c) the court must-

i)          adjourn the matter before it; and

ii)         make an appropriate order setting out the steps the credit provider must complete before the matter may be resumed;

c)        the credit agreement is subject to a pending debt review in terms of Part D of Chapter 4, the court may-

i)          adjourn the matter, pending a final determination of the debt review proceedings;

ii)         order the debt counsellor to report directly to the court, and thereafter make an order contemplated insection 85(b); or

iii)        if the credit agreement is the only credit agreement to which the consumer is a party, order the debt counsellor to discontinue the debt review proceedings, and make an order contemplated in section 85(b);

d)        there is a matter pending before the Tribunal, as contemplated in subsection (3)(b), the court may-

i)          adjourn the matter before it, pending a determination of the proceedings before the Tribunal; or

ii)         order the Tribunal to adjourn the proceedings before it, and refer the matter to the court for determination; or

e)        the credit agreement is either suspended or subject to a debt re-arrangement order or agreement, and the consumer has complied with that order or agreement, the court must dismiss the matter.

131. Repossession of goods

If a court makes an attachment order with respect to property that is the subject of a credit agreement, section 127(2) to (9)and section 128, read with the changes required by the context, apply with respect to any goods attached in terms of that order.

132. Compensation for credit provider

1)        A credit provider who has unsuccessfully attempted to resolve a dispute over the costs of attachment of property in terms of section 129 to 131 directly with the consumer, and through alternative dispute resolution under Part A of Chapter 7, may apply to the court for compensation from the consumer in respect of any costs of repossession of property in excess of those permitted under section 131.

2)        The court may grant an order contemplated in subsection (1) if it is satisfied that-

a)        the consumer knowingly-

i)          provided false or misleading information to the credit provider in terms of section 97; or

ii)         engaged in a pattern of behaviour that was reasonably likely to frustrate or impede the exercise of the credit provider’s right to repossess property under section 129 to 131; and

b)        as a result, the credit provider experienced unreasonable delay or incurred exceptional costs in the exercise of those rights.

133. Prohibited collection and enforcement practices

1)        A credit provider must not-

a)        make use of any document, number or instrument referred to in section 90(2)(l) when collecting on or enforcing acredit agreement; or

b)        direct or permit any other person to do anything contemplated in this subsection on behalf, or as an agent, of the credit provider.

2)        When collecting money owed by a consumer under a credit agreement or when seeking to enforce a credit agreement, a credit provider must not use or rely on, or permit any person to use or rely on, any document, instrument or contract provision referred to in section 90(2)(l).

3)        A person who contravenes this section is guilty of an offence.