| (1) | A consumer may apply to a debt counsellor in the prescribed manner and form to have the consumer declared over-indebted. |
| (2) | An application in terms of this section may not be made in respect of, and does not apply to, a particular credit agreement if, at the time of that application, the credit provider under that credit agreement has proceeded to take the steps contemplated in section 130 to enforce that agreement. |
[Subsection (2) substituted by section 26(a) of Act No. 19 of 2014]
| (a) | may require the consumer to pay an application fee, not exceeding the prescribed amount, before accepting an application in terms of subsection (1); and |
| (b) | may not require or accept a fee from a credit provider in respect of an application in terms of this section. |
| (4) | On receipt of an application in terms of subsection (1), a debt counsellor must— |
| (a) | provide the consumer with proof of receipt of the application; |
| (b) | notify, in the prescribed manner and form— |
| (i) | all credit providers that are listed in the application; and |
| (5) | A consumer who applies to a debt counsellor, and each credit provider contemplated in subsection (4)(b), must— |
| (a) | comply with any reasonable requests by the debt counsellor to facilitate the evaluation of the consumer’s state of indebtedness and the prospects for responsible debt re-arrangement; and |
| (b) | participate in good faith in the review and in any negotiations designed to result in responsible debt re-arrangement. |
| (6) | A debt counsellor who has accepted an application in terms of this section must determine, in the prescribed manner and within the prescribed time— |
| (a) | whether the consumer appears to be over-indebted; and |
| (b) | whether any of the consumer’s credit agreements appear to be reckless. |
[Section 86(6)(b) substituted by section 12(a) of Notice No. 1081, GG 42649, dated 19 August 2019]
| (7) | If, as a result of an assessment conducted in terms of subsection (6), a debt counsellor reasonably concludes that— |
| (a) | the consumer is not over-indebted, the debt counsellor must reject the application, even if the debt counsellor has concluded that a particular credit agreement was reckless at the time it was entered into; |
| (b) | the consumer is not over-indebted, but is nevertheless experiencing, or likely to experience, difficulty satisfying all the consumer’s obligations under credit agreements in a timely manner, the debt counsellor may recommend that the consumer and the respective credit providers voluntarily consider and agree on a plan of debt re-arrangement; or |
| (c) | the consumer is over-indebted, the debt counsellor may issue a proposal recommending that the Magistrate’s Court make either or both of the following orders— |
| (i) | that one or more of the consumer’s credit agreements be declared to be reckless credit, if the debt counsellor has concluded that those agreements appear to be reckless; and |
| (ii) | that one or more of the consumer’s obligations be re-arranged by— |
| (aa) | extending the period of the agreement and reducing the amount of each payment due accordingly; |
| (bb) | postponing during a specified period the dates on which payments are due under the agreement; |
| (cc) | extending the period of the agreement and postponing during a specified period the dates on which payments are due under the agreement; |
[Section 86(7)(c)(ii)(cc) inserted by section 12(b) of Notice No. 1081, GG 42649, dated 19 August 2019]
| (ccA) | determining, as prescribed, the maximum rate of interest, fees or other charges, excluding charges contemplated in section 101(1)(e), under a credit agreement, for such a period as the Magistrate’s Court deems fair and reasonable but not exceeding the period contemplated in section 86A(6)(d); or |
[Section 86(7)(c)(ii)(ccA) inserted by section 12(b) of Notice No. 1081, GG 42649, dated 19 August 2019]
| (dd) | recalculating the consumer’s obligations because of contraventions of Part A or B of Chapter 5, or Part A of Chapter 6. |
| (8) | If a debt counsellor makes a recommendation in terms of subsection (7)(b) and— |
| (a) | the consumer and each credit provider concerned accept that proposal, the debt counsellor must record the proposal in the form of an order, and if it is consented to by the consumer and each credit provider concerned, file it as a consent order in terms of section 138; or |
| (b) | if paragraph (a) does not apply, the debt counsellor must refer the matter to the Magistrate’s Court with the recommendation. |
| (9) | If a debt counsellor rejects an application as contemplated in subsection (7)(a), the consumer, with leave of the Magistrate’s Court, may apply directly to the Magistrate’s Court, in the prescribed manner and form, for an order contemplated in subsection (7)(c). |
| (a) | If a consumer is in default under a credit agreement that is being reviewed in terms of this section, the credit provider in respect of that credit agreement may, at any time at least 60 business days after the date on which the consumer applied for the debt review, give notice to terminate the review in the prescribed manner to— |
| (ii) | the debt counsellor; and |
| (iii) | the National Credit Regulator; and |
| (b) | No credit provider may terminate an application for debt review lodged in terms of this Act, if such application for review has already been filed in a court order or in the Tribunal. |
[Subsection (10) substituted by section 26(b) of Act No. 19 of 2014]
| (11) | If a credit provider who has given notice to terminate a review as contemplated in subsection (10) proceeds to enforce that agreement in terms of Part C of Chapter 6, the court hearing the matter may order that the debt review resume on any conditions the court considers to be just in the circumstances. |
[Subsection (11) substituted by section 26(b) of Act No. 19 of 2014]
