Unintentionally Trapped by Debt Review: Procedural Inadequacies in the National Credit Act 34 of 2005 Relating to Withdrawal from the Debt Review Process

The debt review procedure in terms of the National Credit Act 34 of 2005 is functioning relatively well and benefits both consumers and credit providers. This is despite its somewhat scarce procedural prescriptions, which result in difficulties from time to time. In this respect, a recent procedural challenge has appeared, namely that of consumers who voluntary enter the debt procedure, but who later want to withdraw therefrom – thus, before the procedure has reached its ordinary conclusion, on the basis that their financial situation has improved to the extent that they are no longer over-indebted. The fact that the National Credit Act does not provide for such an exit has led to procedural uncertainty and diverging court decisions. In this article, the relevant legislative provisions (or lack thereof), court and National Consumer Tribunal judgements, regulations, forms, guidelines and explanatory notes are considered to determine whether it is competent for consumers to withdraw from the debt review procedure before it has reached its normal conclusion. Not only provisions in the National Credit Act are considered, but also general civil procedure to contemplate all possibilities in searching for an answer to this procedural difficulty.