The constitutionality of the proposed bill providing for relief for overindebted consumers has been questioned on the grounds that extinguishing debt would deprive creditors of property. The Treasury has sought senior counsel opinion on whether the provisions in the draft National Credit Amendment Bill will have an unconstitutional effect on contractual relations and if it implies deprivation of rights. While agreeing with the need for immediate relief for overindebted people who have no hope of repaying debt, the Treasury raised concern about the bill on Friday during a presentation at public hearings held by Parliament’s trade and industry portfolio committee. The Association of Debt Recovery Agents said that the proposal to extinguish the debt of certain consumers after a long process was unconstitutional. "There can be no doubt that by extinguishing a debt that is due and owing to a credit provider pursuant to a credit agreement amounts to a deprivation of the credit provider’s ...
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