Good news for over-indebted consumers – Debt Relief is finally here!
Nimble welcomes the signing in of the new long awaited National Credit Amendment Bill which aims to provide relief to over-indebted consumers. The process will be administered by the National Credit Regulator although no implementation date has been set yet nor has the step by step process been finalised. For now it seems as though the window for applying will be four years from implementation date.
1.Why was the Debt Relief Bill introduced?
- To provide relief to over-indebted consumers
- More rigorous enforcement of the Act for credit grantors
2.Who qualifies for Debt Relief?
- Earn a gross monthly income of R7,500 or less over the last six months
- Unsecured debt (excludes car finance & home loans) is not more than R50,000
- Do not qualify if sequestrated or subject to an administration order
3.What is the proposed application process?
- Step 1: Apply to the National Credit Regulator (NCR)
- Step 2: Debt Intervention Officers will consider the case & inform creditors & bureaus of the application
- Step 3: Assessment done on your financial situation
- Step 4: If the assessment shows you are able to settle your debts, your application will be rejected. If your assessment shows you are unable
to settle your debts, NCR will determine if you can pay off your debts with 5 years & all or some of your debts repayments may be
suspended for up to a year
- Step 5: 8 months later review your financial situation and:
▪ If you are able to repay your debts within 5 years, NCR will consider restructuring the remaining debt
▪ If you are unable to repay your debts within 5 years, you may get another 12 repayment months free
- Step 6: 8 months later review your financial situation and you still can’t pay off your debts, your debts may be written off in part or full.
4.What happens after your debt is written off?
- Cannot apply for credit for up to a year
- Your credit record may reflect the status that your debt was distinguished which may impact your credit score
