Fresh start procedures for consumer debtors in South African bankruptcy law

✍ Scribed by André Boraine; Melanie Roestoff

• Book ID: 102271184
• Publisher: John Wiley and Sons
• Year: 2002
• Tongue: English
• Weight: 132 KB
• Volume: 11
• Category: Article
• ISSN: 1180-0518
• DOI: 10.1002/iir.95

✦ Synopsis

The purpose of this paper is to give an overview of procedures and certain practical problems relating to debt relief measures in South African law.

The Insolvency Act 24 of 1936 1 is the main source regarding consumer bankruptcy in South Africa but there are some alternative debt relief measures provided for outside the ambit of this Act as well. It is however suggested that the current procedures are insu⁄cient and the system needs to be reformed. 2 Another current issue relating to South African law is the fact that we largely have to deal with a sophisticated ¢rst world economy as well as a third world economy that re£ects in consumer patterns and needs. Probably due to the heritage of apartheid, some can obtain credit from the main stream ¢nancial institutions whilst the majority have to go to either informal money lenders or the so-called micro lenders that grant relatively small loans but at high interest rates. This is a result of the risk involved due to a lack of adequate security that can be granted by this category of debtors. In the current political dispensation many people from the previous disadvantaged communities are however becoming part of the credit industry in some way or another and it is interesting to see if our system provides adequate debt relief measures to deal with current demands. Although this is an important feature of modern South Africa, it is not the purpose of this paper to deal with this aspect at any length.

This paper will therefore focus on debt relief measures provided for by the Insol-vencyAct as well as such alternatives measures outside the ambit of the Insolvency Act. Reform proposals will also be referred to. 3