Amendments To The National Credit Act And Debt Collection
The National Credit Act of South Africa made a few amendments to the Act recently. Most South Africans are not aware of these amendments and even worse is the fact that they are not aware of what it means to them as consumers. It is imperative for each consumer to know the contents of the Act in order to know their rights and to ensure that they are not abused by any financial institution or creditor.
Blacklist and Smearing Protection
When you are in the unfortunate position of being unable to pay your debt, either because of a lack of funds or otherwise, then you can expect to be blacklisted. Because of an inability to repay a person’s creditors over an adversely long period of time, it is denoted by the term ‘bad credit’. The new Act does not allow for a credit history to be recorded once the debtor has settled all due monies. This is good news for consumers that have been blacklisted in the past but bad news for creditors who have no way of checking credit-worthiness.
Before the new Act, debtors had to go to great lengths in order to obtain credit clearance. To obtain clearance an individual had to have zero outstanding debt which also applied to a long-term mortgage. After the implementation of the amended Act, clearance can be obtained if your only outstanding debt is that of a mortgage. Debtors can rest assured that a credit history no longer applies once all their previous debt had been settled.
Affordability Assessment Regulations
The National Credit Act has in place regulations that stop creditors from giving credit to those who cannot afford to pay back monies owed over the regulated time. The Affordability Assessment Regulations have boundaries in place in order to afford a creditor to choose to extend credit and implement agreements within these boundaries.
Delivery Of Notice
To discourage debtors from being blacklisted and/or taken to court without prior knowledge of notice, a court notice concerning the debt owed by an individual or organisation must be delivered to the person directly. The notice will require a signature for proof of delivery purposes.
All these amendments have been designed to further protect the debtor from abusive credit providers. These amendments also recognise creditors who stay within regulation by carrying out the appropriate methods of granting credit. They have improved stead when it comes to being considered good credit providers.
JA Attorneys are experienced and knowledgable pertaining to amendments to the National Credit Act and debt collection practices are highly effective. Contact us today with your urgent matter.