Call on govt to reduce backlog in debt cases

27 October 2009 - 02:00
By unknown

DEBT counsellors have urged the government to find ways of reducing the two-year backlog in debt cases.

DEBT counsellors have urged the government to find ways of reducing the two-year backlog in debt cases.

With the court roll booked to March 2011, national debt advisory company Consumer Assist suggested that the National Consumer Tribunal of the Department of Trade and Industry - which has the same jurisdiction as a high court - be boosted and given branches in parts of the country other than Pretoria.

Consumer Assist chief executive André Snyman said this would "make a huge difference if they could help reduce pressure on the courts".

Snyman suggested that serious consideration should be given to special debtor's courts or those courts dealing with debt not closing for as long as the conventional month-long recess over December.

"We are in an unprecedented financial crisis and government needs to act to do more to help consumers and creditors achieve greater financial stability sooner," Snyman said.

The National Credit Regulator (NCR) has been more critical of the role of creditors in the court logjam.

It says in its recently released annual report that it is a "great concern" that the courts have approved less than 6percent of consumer applications for "debt counselling" since the law was enacted in June 2007.

Only 6000 of 112961 applications made by September this year had been ruled on by a magistrate because the NCR says banks opposed most.

Snyman said petty opposition to debt counselling with creditors opposing even minor technical matters, for example, incorrect spelling - was easing as more realised that debt counselling was working in their interests too.

"Despite that there is a serious logjam before courts and with rapid escalations in those applying for debt counselling - growing at more than 10000 a month, we can anticipate the logjam before courts will worsen unless government intervenes to assist," Snyman warned.

According to Consumer Assist, the NCR indicated that banks and lenders are benefiting from debt counselling to the tune of R97million a month (in August). - I-Net Bridge