It is estimated that out of 23 million credit-active consumers in South Africa there are at least 42% or 9.6 million consumers who have endorsements on their credit rating.

This means they have failed to make payment for three to four months or have judgments against their names.

The type of debts that people accumulate are vehicle repayments, fixed term contracts, credit cards and store accounts.

The National Credit Amendment Bill will bring relief to people who are in this situation and cannot repay their debts.

This bill is currently under review before the Portfolio Committee on Trade and Industry.

What you need to know about The National Credit Amendment Bill

  1. The draft bill wants to erase the debt of consumers who earn a gross monthly income of not more than R7,500 have unsecured debt amounting to R50,000.
  2. Treasury estimates this could write-off between R13bn and R20bn.
  3. The debt extinguishing implementation period provided for is 48 months.
  4. The bill expands the National Credit Regulators (NCR) functions to suspend credit agreements considered to be reckless.
  5. The minister under the bill would be empowered to adjust the maximum gross monthly income of a debt relief applicant and adjust the total qualifying unsecured debt.
  6. The bill proposes a range of new criminal offences for people who operate as credit providers without being registered with the NCR.

Who qualifies for this debt relief?

  1. Individuals earning less than R7‚500 per month.
  2. Individuals who have no assets or investments that can be sold quickly.
  3. Individuals who are not subject to debt review.
  4. Individuals who have less than R50,000 debt outstanding.

Sources: The Highway Mail

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