Alternative Measures for the Discharge of Debts for Over-Indebted Persons under the Magistrates’ Courts Act 32 of 1944
Keywords:over-indebted, debt discharge, creditors, administration order, natural person debtors
Notably, over-indebted natural person debtors may utilise administration orders in terms of the Magistrates’ Courts Act 32 of 1944 (Magistrates’ Courts Act) to circumvent their over-indebtedness and get debt relief in South Africa. However, over-indebtedness is still very problematic in South Africa due to, inter alia, the lack of robust and comprehensive debt discharge measures for over-indebted persons. For instance, administration orders and debt review measures do not provide for the discharge of debts since they merely provide for debt-restructuring to enable the affected debtors to have some time to satisfy their creditors’ claims. This article provides an overview analysis of the administration order under the Magistrates’ Courts Act in order to explore its requirements, possible advantages and disadvantages as a debt relief measure in South Africa. The article also discusses the accessibility and viability of the administration order to low-income earners in South Africa. This is done to unpack the gaps and flaws of the administration order under the Magistrates’ Courts Act in order to recommend possible measures that could be adopted by the policy makers to enable the over-indebted persons to easily access and+ utilise it for debt relief in South Africa.
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