Section 129 demystified

According to the National Credit Act (NCA), if you’ve defaulted on your debt repayments, the credit provider has the responsibility to give you a notice in writing before legal action is taken against you. In the notice, the credit provider may propose that you apply for debt counselling, go to the consumer court or ombud, or find an alternative dispute resolution agent. This is listed under Section 129 of the NCA.

The objective of the notice is to resolve any dispute under your credit agreement, or develop and agree on a plan to bring the payments under the agreement up to date.

In order to comply with the NCA, a Section 129 letter should:

  • Contain your name, ID, and address
  • Have a date of issue – clearly stated
  • State the agreement which you’re in default of and the specific amounts
  • Clearly indicate that the letter serves as a “notice in terms of Section 129”
  • State, in no uncertain terms, that the consumer is in default
  • Include the intentions of the credit provider to enforce its rights as per the agreement
  • Offer possible remedies to avoid enforcement of the credit agreement by the creditor
  • Include a timeframe for the execution of remedies to avoid further legal action

What happens if you ignore the notice?

The credit provider is supposed to give you 10 days to respond to the notice. If you don’t respond by then, the credit provider has the right to take legal action against you. Legal action means serving you with a summons to appear before the magistrate and receiving a judgement against you.

The credit provider is not the one who’s going to pay for the legal action, you are. Whatever the credit provider does to enforce the legal action, you’ll have to accept financial responsibility. The lawyer’s fees, the phone calls, even the postage stamps are going to increase the amount you pay towards your debt. That means you’ll pay more than you actually owe the creditor.

What do you do after receiving the notice?

The notice is your last chance to pay your debt before your creditor takes legal action against you. DebtBusters suggests that you pay your creditors, negotiate a new payment plan, or apply for debt counselling.

Debt counselling is a programme that was introduced by the National Credit Act in 2007 to assist overindebted consumers. If your debt exceeds your income, or if you’re struggling to make your monthly repayments towards your debt, DebtBusters may be able to help you with the relief you need. We have trained and experienced debt counsellors that will help you assess your level of indebtedness and draft a new repayment plan.

If you’ve received a Section 129 notice, give us a call on 086 999 0606 or email us at [email protected] and we’ll see how we’re able to assist you with an affordable financial solution that will help to relieve the burden.

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