Section 129 notice: what a lender must send before going to court

What section 129 requires

Section 129(1)(a) of the National Credit Act (NCA) lets a credit provider tell a consumer in default, in writing, about the default and propose that the consumer refer the agreement to a debt counsellor, an alternative dispute resolution (ADR) agent, the consumer court or the ombud with jurisdiction, to resolve any dispute or agree a plan to bring the payments up to date.

Section 129(1)(b) makes it compulsory: you may not start any legal proceedings to enforce the agreement until you have delivered that notice (or a debt review termination notice under section 86(10)) and met the conditions in section 130. Skip it and the court must adjourn the case and list the steps you must complete first (section 130(4)(b)).

You can send the notice the day after a missed instalment. Many online answers say the account must first be 20 business days in arrears; that is a condition for going to court, not for sending the notice. Section 129(1) does not apply to an agreement under a debt restructuring order (section 129(2)).

Section 130: when you may go to court

Under section 130(1), you may go to court only if:

• the consumer is in default and has been in default for at least 20 business days;
• at least 10 business days have passed since you delivered the notice;
• the consumer has not responded, or has responded by rejecting your proposals; and
• for an instalment agreement, secured loan or lease, the consumer has not surrendered the goods under section 127.

The court will also not decide the case if you sued while the matter was before a debt counsellor, ADR agent, consumer court or ombud, or after the consumer accepted your proposal and is honouring it, is keeping to an agreed plan or has brought the payments up to date (section 130(3)).

Business days exclude weekends and public holidays; leave out the first day and include the last (section 2(5)). An example:

How to deliver the notice and prove it

The National Credit Amendment Act 19 of 2014, in force since 13 March 2015, added three delivery rules:

• Method (section 129(5)): registered mail, or delivery to an adult person at the location the consumer designated.
• The consumer's choice (section 129(6)): the consumer must choose a method in writing. Put the choice and the address in your agreement.
• Proof (section 129(7)): the postal service's written confirmation that the notice reached the relevant post office, or the signature or mark of the adult who received it.

In Sebola v Standard Bank [2012] ZACC 11 the Constitutional Court held that posting alone is not enough: the lender must prove delivery, ordinarily with a track and trace printout showing the notice reached the consumer's correct post office. In Kubyana v Standard Bank [2014] ZACC 1 it held that a consumer cannot defeat delivery by ignoring collection slips. Prove that the notice went by registered mail to the correct branch and that the Post Office sent a collection slip to the consumer's address; the court then infers that a reasonable consumer would have collected it, unless the consumer explains otherwise.

Email, SMS and WhatsApp are not methods under section 129(5): use them for a courtesy copy only. The National Credit Regulator's Guideline 02/2022 says registered mail can also be met by an electronic copy that the South African Post Office registers and sends on (section 19(4) of the Electronic Communications and Transactions Act). Ordinary email cannot.

Check that the consumer's chosen branch is still open. If it has closed, registered mail cannot reach the correct branch, so deliver by hand to an adult at the consumer's chosen address and get a signature.

What the notice must say

No form is prescribed. Include:

• The default: agreement number, arrears and the date of the calculation.
• The section 129(1)(a) proposal: referral to a debt counsellor, an ADR agent (accredited by the NCR under section 134A), the consumer court or the ombud with jurisdiction, to resolve any dispute or agree a plan.
• A name and number for agreeing a plan with you directly.
• The right to remedy the default under section 129(3), with your payment details.
• That you may go to court if the consumer does not respond within 10 business days of delivery, or rejects the proposals.

Section 63 gives the consumer a right, where reasonable, to documents in an official language they read or understand, so offer the notice in their language.

Sample section 129 notice

Delete options that do not apply and keep a signed copy.

[Credit provider's registered name]
NCR registration number: [NCRCP number]
[Physical address]
[Phone number] | [Email address]

[Date]

Delivered by: [registered mail, tracking number ______] OR [hand, to an adult at your chosen address]

To: [Consumer's full name]
[Address chosen in the agreement]

Agreement: [type of agreement, for example personal loan] dated [date]
Account number: [number]

NOTICE IN TERMS OF SECTION 129(1)(a) OF THE NATIONAL CREDIT ACT 34 OF 2005

1. You are in default under this agreement. As at [date] your arrears are R[amount] ([number] unpaid instalments of R[amount] due on [dates]). Your outstanding balance is R[amount].

2. We propose that you refer this credit agreement to a debt counsellor, an alternative dispute resolution agent, the consumer court or the ombud with jurisdiction, so that any dispute under the agreement can be resolved or we can agree on a plan to bring your payments up to date.
   Debt counsellors and accredited dispute resolution agents: National Credit Regulator, www.ncr.org.za, 0860 627 627.
   Consumer court: [name and contact details of the consumer court in your province].
   Ombud: [name and contact details of the ombud with jurisdiction].

3. You may also contact us to agree on a payment plan: [name], [phone number].

4. You may remedy the default at any time before we cancel the agreement by paying all overdue amounts, our prescribed default administration charges and the reasonable costs of enforcing the agreement up to the date you pay. Pay into: [bank, account number, branch code, reference].

5. If you do not respond within 10 business days of delivery of this notice, or if you reject these proposals, we may approach the court to enforce the agreement. We may claim [the arrears] OR [the full outstanding balance, as the agreement allows], interest and legal costs[, and the return of the goods].

6. If you would like this notice in another official language, contact us at [phone number].

[Name]
[Position]
For and on behalf of [credit provider's registered name]

If the consumer is under debt review

Since 13 March 2015, section 86(2) keeps an agreement out of a debt review application only if the lender has already taken the steps in section 130, that is, gone to court. Before then, a delivered section 129 notice was enough.

• Once the debt counsellor notifies you, you may not litigate until the consumer defaults under a re-arrangement or the review ends (section 88(3)).
• If the consumer is in default and 60 business days have passed since the application, you may terminate the review by notice to the consumer, the debt counsellor and the NCR (section 86(10)(a)), unless it has already been filed in a court or the Tribunal (section 86(10)(b)).
• That notice counts as the section 129 notice, and the 10 business day wait runs from its delivery (sections 129(1)(b)(i) and 130(1)(a)). The court may order the review to resume (section 86(11)).
• If the consumer defaults on a court-ordered re-arrangement, you may enforce (section 88(3)(b)(ii)). Section 129(2) says section 129(1) does not apply to such agreements, but a written notice of default still strengthens your record.

Reinstatement: section 129(3) and (4)

Until you cancel the agreement, the consumer may remedy the default by paying all overdue amounts, your prescribed default administration charges and reasonable enforcement costs to date (section 129(3), as amended from 13 March 2015). The agreement then carries on.

In Nkata v FirstRand Bank [2016] ZACC 12, on the earlier wording, the Constitutional Court held that reinstatement happens by law, without your consent. Legal costs count only once they are reasonable, agreed or taxed and the consumer has notice of them, so send a costs statement early.

Under section 129(4), there is no reinstatement after a sale of property under an attachment order or a section 127 surrender, after execution of another court order enforcing the agreement, or after termination under section 123.

Lender checklist

1. Confirm the agreement records the consumer's written choice of delivery method and address (sections 96 and 129(6)).
2. Calculate the arrears; check for debt review or a restructuring order.
3. Send by registered mail to the chosen branch, or by hand to an adult at the chosen address, plus an email or SMS copy.
4. File the track and trace printout or signed slip with a copy of the notice.
5. Diarise 10 business days after delivery and 20 after default.
6. Keep working the account: a plan agreed in those 10 days costs less than a summons. Planar handles this stage for lenders.
7. If the consumer refers the matter or keeps to a plan, do not sue (section 130(3)(c)).
8. In your particulars of claim, state how and when the notice was delivered and attach the proof.

Questions people ask