Once a credit provider applies for judgement against you, you cannot oppose the court application on the basis that you are willing to seek debt counselling, if you resisted debt counselling when it was first offered to you.
WHAT IS A SECTION 129?
A section 129 letter is a notice issued by a credit provider that it intends to take legal action against a consumer who has defaulted on a loan and the loan in question is in arrears.The National Credit Act (NCA) states that before a credit provider can launch default proceedings, it must notify you, in writing, of your right to refer the credit agreement to a debt counsellor, an alternative dispute resolution agent, the Credit Ombudsman or a consumer court, in an attempt to resolve any dispute related to the agreement or to agree on a plan to settle your debt. The notice gives you 10 days in which to choose a remedy and notify the credit provider.
Although the National Credit Regulator is of the view that a section 129 letter is a notice of impending legal action, in the spirit of the Act, the courts have interpreted it differently.
Paul Slot, the president of the Debt Counsellors Association of South Africa, says this interpretation is “grossly unjust to consumers”, because it denies you a remedy (debt counselling) offered to you in the notice. This was never the intention of the NCA.
Legislators agreed and have addressed this in the National Credit Amendment Act, which has been assented to by the president.
OVER-INDEBTED CONSUMERS NEED TO CHANGE THEIR LIFESTYLES
The courts will not be sympathetic to consumers who are in debt but who do not want to lower their standard of living. Consumers have an emotional attachment to homes, cars and their lifestyles, which contributes to a high fallout rate among consumers who approach the National Debt Mediation Association (NDMA) for help. This could become a major problem to many consumers living on a high expenditure budget trying to keep up with society. Most times, consumers are indebting themselves into product and services the generally don’t need or use. The section 129 notice offers an avenue for consumers to resolve their payment difficulties by making use of various mechanisms, but consumers wait too long before asking for help. If they do ask for help, some credit providers are not helpful, or the consumer isn’t able to conduct effective negotiations on their own. Many consumers are not educated in the financial field to make such negotiations on a mediation level as a debt counsellor could do.