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National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 4 : Consumer Credit Policy

Part D : Over-indebtedness and reckless credit

79. Over-indebtedness

 

(1) A consumer is over-indebted if the preponderance of available information at the time a determination is made indicates that the particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, having regard to that consumer’s—
(a) financial means, prospects and obligations; and
(b) probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer’s history of debt repayment.

 

(2) When a determination is to be made whether a consumer is over-indebted or not, the person making that determination must apply the criteria set out in subsection (1) as they exist at the time the determination is being made.

 

(3) When making a determination in terms of this section, the value of—
(a) any credit facility is the settlement value at that time under that credit facility; and
(b) any credit guarantee is—
(i) the settlement value of the credit agreement that it guarantees, if the guarantor has been called upon to honour that guarantee; or
(ii) the settlement value of the credit agreement that it guarantees, discounted by a prescribed factor.