The interaction between the debt relief measures in the National Credit Act 34 of 2005 and aspects of insolvency law

One of the main features of the National Credit Act, which came into full operation on 1 June 2007, is its objective to afford debt relief to over-burdened consumers. Otto remarks that the NCA is an ambitious, perhaps even idealistic, piece of legislation with pronounced socio-economic aims. The purpose of the NCA as stated in section 3 thereof is inter alia to promote responsibility in the credit market by encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers, and to discourage reckless credit granting by credit providers and contractual default by consumers. It aims to address and prevent over-indebtedness of consumers and provides mechanisms for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations.