South Africa is one of the most indebted nations in the world, but consumers could find some relief in the near future, thanks to the passing of the National Credit Amendment Bill.
The bill, which is now with the National Council of Provinces for consideration, enables low-income or poverty- stricken people to manage their debt through a process of debt restructuring.
More specifically, the bill will allow for intervention for over-indebted consumers earning R7 500 per month or less. The first step in the intervention process involves debt restructuring, which will give consumers five years to pay their debt. If that proves to be unrealistic, the credit agreement will be suspended for 12 to 24 months but there will be regular reviews.
What’s more, the National Credit Amendment Bill will reportedly enforce responsible lending and borrowing, and any unregistered lenders will be arrested. ANC MP Joanmariae Fubbs also added that Magistrates will have the power to make rulings on reducing interests on loans to as little as zero percent to enable consumers to repay their debt.
While the bill drew support from the ANC and EFF, the DA weren’t as convinced. MP Dean Macpherson argued that the amendments will increase the cost of credit and restrict access to credit. He also pointed out that it’s very likely that the Consumer Tribunal and National Credit Regulator will struggle to process the mass influx of applications.
At LAW FOR ALL, we understand how easy it can be to buckle under financial pressure and make mistakes. So we thought it sensible to put together some handy tips to keep you legally savvy and help you survive these financially trying times by combating your debt.