The purpose of this thesis is to do a comparative reappraisal of debt relief measures
available to natural person debtors in the South African insolvency law. Although the
broader South African natural person insolvency system currently includes three
statutory debt relief procedures, namely, the sequestration procedure regulated by
the Insolvency Act 24 of 1936, the administration order procedure in terms of the
Magistrates’ Courts Act 32 of 1944 and the debt review procedure found in the
National Credit Act 34 of 2005, not all natural person debtors have access to the
system. The majority of this marginalised group are debtors with no income and no
assets (the so-called No Income No Asset (NINA) debtors). Also, only one measure
provides real debt relief in the form of a statutory discharge of debt. Furthermore, the
existing measures have developed in a haphazard fashion which has led to a
multiplicity of procedures, regulators and forums that resulted in ineffectiveness,
inequality and uncertainty. The larger system therefore lacks proper policy
considerations.
This thesis provides the reasons for reform by, amongst others, arguing that the
present situation is unconstitutional as it unreasonably and unfairly discriminates
against the NINA group of debtors in particular. It measures the broader South
African system against internationally accepted principles of efficient and effective
natural person insolvency regimes. In this regard it is found that the system as a
whole is seriously deficient. With reference to international principles and guidelines
as well as suitable attributes found in foreign jurisdictions, the thesis concludes with
suggestions for real law reform. Both substantive and procedural recommendations
are made.