One of the bills that are awaiting sign off, now that the election has passed, is the National Credit Amendment Bill.
What are the aims of the bill?
The bill aims to provide relief to over-indebted South Africans who have no other means of extracting themselves from over-indebtedness. It will allow certain applicants to have their debt suspended in part or in full for up to 24 months. This debt may then be written off altogether if the financial circumstances of the applicant do not improve.
The criteria for meeting this debt write-off include:
- Where the unsecured debt is not more than R50,000;
- Where the unsecured debt was accrued through unsecured credit agreements, unsecured short term credit transactions or unsecured credit facilities only;
- Where the person earned no more than R7,500 a month over the last six months;
The bill also introduces a number of new offences related to debt intervention:
It will now be an offence for a person who intentionally submits false information related to debt intervention. Any person who intentionally alters his or her financial circumstances, or persons who intentionally alter their joint financial circumstances, to qualify for debt intervention, will also be guilty of an offence.
Click here to read an article that was published on the BusinessTech website. The article shares the Banking Association of South Africa (Basa) sentiment that it does not support the principle of debt forgiveness.