Unemployment and consumer debt seem to go hand in hand in many ways. Now while that may seem obvious, it also raises the question of how they secured a loan without income- this is where the biggest issue comes to light.
The National Credit Regulator and the National Consumer Tribunal are ineffective to the extent that individuals and companies are turning to the courts to obtain justice on behalf of the consumer.
Reckless lending is taking knocks, left, right and center
Reckless lending is a huge financial burden on some and is still prevalent across South Africa today. This occurs when credit providers enter into a credit agreement and the debtor does not have the means to pay back the amount. Never mind covering the cost of living expenses.
To curb reckless lending, a new regulation has made it compulsory for all lenders to register with the National Credit Regulator (NCR).
Debt Forgiveness for the Over-indebted
A ‘debt forgiveness programme’ for low-income groups was suggested by Adrian Williams of the ANC. “This shouldn’t be for the rich who have just been spending recklessly,” he said at an NCR brief to MPs. Debt forgiveness entails writing off a portion of debt owed by a financially troubled debtor.
ANC committee chairperson Joanmariae Fubbs pointed out how successful debt forgiveness programmes had been in both developing and developed countries. Continue reading
NCR Crackdown on Creditors
Last week, the National Credit Regulator (NCR) referred 13 microlenders to the National Consumer Tribunal (NCT) for numerous violations of the National Credit Act (NCA). These referrals are part of a greater NCR crackdown on law-breaking creditors. Continue reading
Who Can Enter a Debt Review Program?
If you are over-indebted or having financial problems, a debt review program will allow you to rehabilitate your finances, by enabling you to afford your monthly debt repayments, with a view to settling your debts and receiving a clearance certificate that wipes your credit record clean.
In order to qualify for a debt review program, you must be permanently employed and earning an income. Moreover, you must adhere to the rule of no access to loans or credit cards, while you are undergoing debt review, as doing so will lead to debt review termination. Continue reading