An Analytical Precis of Debt Relief Measures under the Insolvency Act 24 of 1936
Keywords:
debt relief; voluntary surrender; compulsory sequestration; friendly sequestration; advantage to creditorsAbstract
Most poor and low-income earners are over-indebted since they rely too much on credit for their day-to-day consumer needs in South Africa. Owing to this, debt relief measures have become so important in the current South African credit driven society. Accordingly, there are four statutory debt relief measures that are available to over-indebted persons and insolvent debtors in South Africa, namely, the sequestration proceedings in terms of the Insolvency Act 24 of 1936 as amended (Insolvency Act), the administration order under the Magistrates Courts Act 32 of 1944 as amended (Magistrates Courts Act), the debt review that is contained in the National Credit Act 34 of 2005 as amended (NCA) and the recently introduced debt intervention in terms of the National Credit Amendment Act 7 of 2019 (Credit Amendment Act), which is yet to be successfully utilised. Despite these commendable efforts, most of the available debt relief measures are not yet easily accessible to the poor and low-income earners in South Africa. Given this background, the article discusses the sequestration proceedings as a debt relief measure in terms of the Insolvency Act. This is done to explore the strengths and weaknesses of such proceedings in relation to their accessibility and provision of debt relief measures to the poor and low-income earners in South Africa.
References
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Chitimira, H. & Mabina, T.T. (2019). The Meaning of Advantage to Creditors under Voluntary, Compulsory and Friendly Sequestration in South Africa. Acta Universitatis Danubius Juridica, 15 (2), pp. 62-83.
Chitimira, H. (2019). Advantage to Creditors in Compulsory Sequestration Proceedings: Body Corporate of Empire Gardens v Sithole 2017 4 SA 161 (SCA). Journal for Contemporary Roman-Dutch Law, 82 (2), pp. 342-352.
Coetzee, H. & Roestoff, M. (2013). Consumer Debt Relief in South Africa: Should the Insolvency System Provide for NINA Debtors? Lessons from New Zealand. International Insolvency Review, 22 (3), pp. 188-210.
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Evans, R.G. (2001). Friendly Sequestrations, the Abuse of the Process of Court, and Possible Solutions for Overburdened Debtors. SA Merc LJ, pp. 485-508.
Evans, R.G. (2010). Law Reform in Respect of Assets in Insolvent Estates in South Africa. SA Mercantile Law Journal, 22 (4), pp. 465-483.
Edwards, S. (2003). Debt Relief and Fiscal Sustainability. Review of World Economics, 139 (1), pp. 38-65.
Evans, R. & Haskins, M. (1990). Friendly Sequestrations and the Advantage of Creditors. South African Mercantile Law Journal, 2 (2), pp. 246-251.
Evans, R. G. (2010). A Brief Explanation of Consumer Bankruptcy and Aspects of the Bankruptcy Estate in the United States of America. Comparative and International Law Journal of Southern Africa, 43 (3), pp. 337-351.
Fletcher, I. F. (2017). The Law of Insolvency. London: Sweet and Maxwell.
Loubser, A. (1997). Ensuring Advantage to Everyone in a Modern South African Insolvency Law. SA Merc LJ, pp. 325-333.
Mabe, Ζ. (2019). Alternatives to Bankruptcy in South Africa that Provides for a Discharge of Debts: Lessons from Kenya. PER, 22 (1), pp.1-34.
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Kunst, J.A., Boraine, A. & Burdette, D. (2014). Meskin Insolvency Law and Its Operation in Winding-Up Service Issue 42, Durban: Lexis Nexis.
Pepler, J. J. (2013). Advantage for Creditors in South African Insolvency Law – A Comparative Investigation. LLM dissertation: University of Pretoria.
Rampersad, K. (2013). The Interface between the Insolvency Act 24 of 1936 and the National Credit Act 34 of 2005. Masters in Business Law: University of KwaZulu-Natal.
Roestoff, M. & Renke, S. (2005). A Fresh Start for Individual Debtors: The Role of South African Insolvency and Consumer Protection Legislation. International Insolvency Review, 14 (2), pp. 93-109.
Roestoff, M. (2018). Rehabilitation of an Insolvent and Advantage to Creditors under the Insolvency Act 24 of 1936: Ex parte Purdon 2014 JDR 0115 (GNP). Journal of Contemporary Roman-Dutch Law, 81, pp. 306-316.
Roestoff, M. & Coetzee, H. (2012). Consumer Debt Relief in South Africa: Lessons from America and England; and Suggestions for the Way Forward. SA Mercantile Law Journal, 24 (1), pp. 53-76.
Sharrock, R.; Van Der Linde, K. & Smith, A. (2012). Hockly’s Insolvency Law. Cape Town: Juta & Co. Ltd.
Temperman, E. (2014). The Judiciary’s Discretion in Sequestration Applications. LLM dissertation: University of Pretoria.
Van der Merwe, C.G. & du Plessis, J.E. (2004). Introduction to the Law of South Africa. The Haque: Kluwer Law International.
Boraine, A. & Van Heerden, C. (2010). To Sequestrate or not to Sequestrate in View of the National Credit Act 34 of 2005: A Tale of Two Judgments. PELJ, 13 (3), pp. 84-124.
Van Heerden, C. & Boraine, A. (2009). The Interaction between the Debt Relief Measures in the National Credit Act 24 of 2005 and Aspects of Insolvency Law. PELJ, 12 (3), pp. 22-63.
Visser, C.; Pretorius, J.T.; Sharrock, R. & Van Jaarsveld, M. (2004). Gibson: South African Mercantile and Company Law. Cape Town: Juta and Company Ltd.
World Bank, (2013). Working Group on the Treatment of the Insolvency of Natural Persons Report on the Treatment of the Insolvency of Natural Persons. World Bank, Washington DC.
Asheela, N.V. (2012). The Advantage Requirement in Sequestration Applications: A Call for Relaxation. LLM dissertation: University of Pretoria.
Bertelsmann, E.; Evans R.G.; Harris, A.; Kelly-Louw, M.; Loubser, A.; Roestoff, M.; Smith, A.; Stander, L. & Steyn, L. (2019). Mars: The Law of Insolvency in South Africa. 10th ed, Cape Town: Juta & Co Ltd.
Bond, P. (2013). Debt, Uneven Development and Capitalist Crisis in South Africa: From Moody’s Macroeconomic Monitoring to Marikana Microfinance Mashonisas. Third World Quarterly, 34 (4), pp. 569-592.
Boraine, A. & Roestoff, M. (2002). Fresh Start Procedures for Consumer Debtors in South African Bankruptcy Law. International Insolvency Review, 11 (1), pp. 1-11.
Boraine, A. & Roestoff, M. (2000). Developments in American Consumer Bankruptcy Law: Lessons for South Africa (Part 2). Obiter, pp. 241-270.
Boraine, A. & Roestoff, M. (2014). Revisiting the State of Consumer Insolvency in South Africa after Twenty Years: The Courts’ Approach, International Guidelines and an Appeal for Urgent Law Reform. Journal for Contemporary Roman-Dutch Law, 77 (3), pp. 351-374.
Chitimira, H. & Mabina, T.T. (2019). The Meaning of Advantage to Creditors under Voluntary, Compulsory and Friendly Sequestration in South Africa. Acta Universitatis Danubius Juridica, 15 (2), pp. 62-83.
Chitimira, H. (2019). Advantage to Creditors in Compulsory Sequestration Proceedings: Body Corporate of Empire Gardens v Sithole 2017 4 SA 161 (SCA). Journal for Contemporary Roman-Dutch Law, 82 (2), pp. 342-352.
Coetzee, H. & Roestoff, M. (2013). Consumer Debt Relief in South Africa: Should the Insolvency System Provide for NINA Debtors? Lessons from New Zealand. International Insolvency Review, 22 (3), pp. 188-210.
Coetzee, H. (2015). A Comparative Reappraisal of Debt Relief Measures for Natural Person Debtors in South Africa. LLD thesis: University of Pretoria.
Coetzee, H. (2016). Is the Unequal Treatment of Debtors in Natural Person Insolvency Law Justifiable? A South African Exposition. International Insolvency Review, 25 (1), pp. 36-55.
Corden, W.M. (1988). Debt Relief and Adjustment Incentives. Staff Papers, 35 (4), pp. 628-643.
Evans, R.G. (2001). Friendly Sequestrations, the Abuse of the Process of Court, and Possible Solutions for Overburdened Debtors. SA Merc LJ, pp. 485-508.
Evans, R.G. (2010). Law Reform in Respect of Assets in Insolvent Estates in South Africa. SA Mercantile Law Journal, 22 (4), pp. 465-483.
Edwards, S. (2003). Debt Relief and Fiscal Sustainability. Review of World Economics, 139 (1), pp. 38-65.
Evans, R. & Haskins, M. (1990). Friendly Sequestrations and the Advantage of Creditors. South African Mercantile Law Journal, 2 (2), pp. 246-251.
Evans, R. G. (2010). A Brief Explanation of Consumer Bankruptcy and Aspects of the Bankruptcy Estate in the United States of America. Comparative and International Law Journal of Southern Africa, 43 (3), pp. 337-351.
Fletcher, I. F. (2017). The Law of Insolvency. London: Sweet and Maxwell.
Loubser, A. (1997). Ensuring Advantage to Everyone in a Modern South African Insolvency Law. SA Merc LJ, pp. 325-333.
Mabe, Ζ. (2019). Alternatives to Bankruptcy in South Africa that Provides for a Discharge of Debts: Lessons from Kenya. PER, 22 (1), pp.1-34.
Mabe, Z. & Evans, R.G. (2014). Abuse of Sequestration of Proceedings in South Africa Revisted. SA Merc LJ, pp. 651-667.
Kunst, J.A., Boraine, A. & Burdette, D. (2014). Meskin Insolvency Law and Its Operation in Winding-Up Service Issue 42, Durban: Lexis Nexis.
Pepler, J. J. (2013). Advantage for Creditors in South African Insolvency Law – A Comparative Investigation. LLM dissertation: University of Pretoria.
Rampersad, K. (2013). The Interface between the Insolvency Act 24 of 1936 and the National Credit Act 34 of 2005. Masters in Business Law: University of KwaZulu-Natal.
Roestoff, M. & Renke, S. (2005). A Fresh Start for Individual Debtors: The Role of South African Insolvency and Consumer Protection Legislation. International Insolvency Review, 14 (2), pp. 93-109.
Roestoff, M. (2018). Rehabilitation of an Insolvent and Advantage to Creditors under the Insolvency Act 24 of 1936: Ex parte Purdon 2014 JDR 0115 (GNP). Journal of Contemporary Roman-Dutch Law, 81, pp. 306-316.
Roestoff, M. & Coetzee, H. (2012). Consumer Debt Relief in South Africa: Lessons from America and England; and Suggestions for the Way Forward. SA Mercantile Law Journal, 24 (1), pp. 53-76.
Sharrock, R.; Van Der Linde, K. & Smith, A. (2012). Hockly’s Insolvency Law. Cape Town: Juta & Co. Ltd.
Temperman, E. (2014). The Judiciary’s Discretion in Sequestration Applications. LLM dissertation: University of Pretoria.
Van der Merwe, C.G. & du Plessis, J.E. (2004). Introduction to the Law of South Africa. The Haque: Kluwer Law International.
Boraine, A. & Van Heerden, C. (2010). To Sequestrate or not to Sequestrate in View of the National Credit Act 34 of 2005: A Tale of Two Judgments. PELJ, 13 (3), pp. 84-124.
Van Heerden, C. & Boraine, A. (2009). The Interaction between the Debt Relief Measures in the National Credit Act 24 of 2005 and Aspects of Insolvency Law. PELJ, 12 (3), pp. 22-63.
Visser, C.; Pretorius, J.T.; Sharrock, R. & Van Jaarsveld, M. (2004). Gibson: South African Mercantile and Company Law. Cape Town: Juta and Company Ltd.
World Bank, (2013). Working Group on the Treatment of the Insolvency of Natural Persons Report on the Treatment of the Insolvency of Natural Persons. World Bank, Washington DC.
Published
2020-07-10
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Chitimira, H. ., & Magau, P. . (2020). An Analytical Precis of Debt Relief Measures under the Insolvency Act 24 of 1936: Array. EuroEconomica, 39(2). Retrieved from https://dj.univ-danubius.ro/index.php/EE/article/view/367
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