Passes Away?
TITLE: What Happens to Debt Review When Someone Dies? | NDRC South Africa | META: When a person under debt review passes away, debt review terminates and the estate is administered under the Administration of Estates Act.
When a person under debt review passes away, the debt review process terminates by operation of law. The NCA governs living consumers. A deceased estate is administered under the Administration of Estates Act 66 of 1965 and falls outside the scope of the debt review framework.
What happens to the debts:
The outstanding debts of the deceased become claims against the deceased estate. The executor appointed by the Master of the High Court is responsible for collecting all assets, settling all valid claims against the estate in the prescribed order of preference, and distributing any remaining assets to heirs in accordance with the will or intestate succession laws.
What happens to the debt review status:
• The debt review flag on the credit profile of the deceased does not affect the estate administration process.
• Creditors who were part of the debt review plan become ordinary creditors of the estate and submit claims through the executor.
• Credit providers are not bound by the restructured debt review payment amounts against the estate. They can claim the full outstanding amount as a creditor of the estate.
If the deceased was married in community of property:
The surviving spouse may be affected because in a community of property marriage the estate is a joint estate. The surviving spouse's share of the joint estate may be used to settle debts. The surviving spouse should seek legal advice from an attorney specialising in deceased estate administration.
Family members of a deceased person under debt review should contact NDRC for guidance on the debt review status and should consult an attorney for advice on estate administration.