More than 700 magistrates countrywide are being trained to implement the new National Credit Act, which takes effect on June 1.
The act came into effect last year, but will only be implemented in June.
It intends to protect consumers by promoting the growth of a fair and accessible credit market industry.
The act empowers magistrates to set aside or suspend all or part of a consumer's rights and obligations under a credit agreement that is deemed to have been given recklessly.
Magistrates are also being trained to direct over-indebted consumers to alternative dispute resolution agents as well as debt counsellors
The three-day project, sponsored by the US Agency for International Development, aims to make magistrates aware of the full scope of the new legislation.
Henro du Plessis, senior magistrate and coordinating lecturer at the Justice College, says the act will go a long way to "liberating consumers from debt traps".
Chief executive Gabriel Davel went on to say the act would have a significant affect on South Africa's civil courts because it replaced outdated legislation.
He said it reflected a consistent regulation of consumer credit and was the first of its kind in Africa.
The act protects consumers:
l By promoting disclosure and responsible credit granting and use.
l By prohibiting reckless credit extension and providing for debt reorganisation in cases of over-indebtedness.
l By developing a credit market especially for those who historically could not access credit.
l By promoting responsibility and equity through balancing respective rights and obligations.
l By correcting imbalances in negotiating power between consumers and credit providers.
l By evaluating credit conditions and interest rates in different consumer credit markets.
l By giving consumers the right to receive information in an official language that the consumer reads and understands.
l By allowing over-indebted consumers to have their debt repayments to all credit providers re-scheduled by the court and pay reduced instalments over a longer period.
l Where debts have been rearranged and the consumer satisfies every obligation, a clearance certificate will be issued.
l A credit bureau receiving a clearance certificate must delete completely from its records the fact that the consumer was subject to a debt-rearrangement.
l Credit sales at a person's home or work will be strictly limited.
l Advertising and marketing must contain prescribed information on the cost of credit.