FOR the past five years, South African consumers have been protected by laws designed to stop them getting too deeply into debt. No doubt legislators had in mind naive borrowers who genuinely overestimated their capacity to repay a loan or were bullied by sales staff with an eye to commission.
But since the law came into effect, courts have also seen more financially literate consumers trying to use this legislation to stop creditors taking action when they aren't paid what they are owed.
One such case was heard in the high court in Cape Town late last year and the decision in that matter has become that court's first reported judgment for 2011.
It concerned an ultimately successful application by Standard Bank for summary judgment of more than R1 million against Geoffrey and Deidre Kelly. They borrowed money to buy seven erven in Kuils River as an investment, thinking to finance the bonds by renting out the properties.
Each erf cost R435 000 and the purchase was financed by several institutions, including Standard Bank. When the Kellys defaulted on repayments, Standard went to court.