The position of 'low income low asset' (LILA) debtors in South Africa : the need for legislative reform.

Abstract

Consumer over-indebtedness affects anyone in the world whether rich or poor. However, it is a common feature amongst the poor or rather the low income earners, since they will from time to time find other means to subsidise the little that they have. They achieve this through borrowing money from loan sharks who instead of assisting them from their over-indebtedness worsen their position through interests from these loans. As any other consumer debtor they deserve protection not just protection but equal and appropriate protection in order to obtain debt relief. In South Africa there are three debt relief mechanisms at the disposal of debtors these are found under the Insolvency Act of 1936, the Magistrates’ Court Act of 1944 and the National Credit Act of 2005. This dissertation seeks to examine the South African consumer insolvency and debt relief legislative provisions. This will be done in order to ascertain whether these legislative provisions appropriately provide debt relief to LILA debtors. Failure to find adequate provisions for the relief of LILA debtors in South Africa this study will endeavour to ascertain if whether there may be appropriate debt relief mechanisms in foreign jurisdictions which have the potential of granting a LILA debtor debt relief. This comparative study will be done on countries such as the United States of America, England and Wales to name but a few. This comparative study is of importance since it will give lessons to South Africa on how to address the position of LILA debtors in regard to providing them with debt relief.