Debtors and debt counsellors who assume that a restructuring agreement cancels interest payable on debts are in for a nasty shock. A new decision by a full bench of the high court has held that magistrates dealing with debt-restructuring applications have no right to scrap the interest payable.In addition, a debt rearrangement proposal for a monthly instalment less than the monthly interest due is unlawful and no magistrate has the power to grant such an order.This important clarification of the law by judges Glenn Goosen and Thami Beshe, sitting in the high court in Port Elizabeth, emerged from a review application by Nedbank against debtor Fabian Norris, his debt counsellor Sonja Volschenk and the magistrate who had heard Norris’s debt rescheduling application. Their order will have far-reaching impact, for the court heard that in “tens of thousands” of similar cases, magistrates all over SA have issued equally invalid orders.Norris took a loan of R120 000 in 2011, agreeing that ...
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