FOR THOSE OVER INDEBTED CONSUMERS THAT:

EARN LESS THAN R 7500 PER MONTH AND

ARE UNABLE TO BE ASSISTED UNDER DEBT REVIEW

The current debt intervention bill provide for total debt extinguish (wipe out) with certain criteria that we at Accord Debt Solutions CC will assist consumers with

For consumers to be ready to lodge application in terms of the proposed legislation pertaining to the proposed debt extinguish programme, it is of utmost importance:

• That consumers who would apply for such assistance do not go under Debt Review
  
• Appoint us to prove over indebtedness.
  
• Appoint us to obtain agreements entered into between themselves and creditors while paying on installments that they are able to afford.
  
• Where existing outstanding debt is in excess of R 50 000 ay November 2017, appoint us to ascertain legality of certain creditors claims with the intention of possibly disputing illegal and or irregular creditors claims, causing for total claims being less than R 50 000.
  
• Do not incur further debt. 
  

APPLY FOR ASSISTANCE TODAY 

Information regarding the debt extinguish program.

For a long time, South Africans have been warned about the out-of-control debt of our citizens. A lot of this responsibility has fairly been pushed back to credit providers, who in the past have allowed consumers to use up to 70% and 80% of their monthly income to repay debt. This practice is reckless and immoral, which is why the National Credit Act has been established

Last year, a draft bill giving the National Consumer Tribunal the power to extinguish debt in certain circumstances was published for public comment by Parliament's Trade and Industry committee, which formulated it. The South African Institute of Professional Accountants was one of many entities that made submissions on the draft National Credit Amendment Bill.

The current debt intervention Bill that is being proposed sets out a process that both credit providers and credit bureaus must follow when they are lending money, but SAIPA's submission highlighted certain parts of the proposal that require further thinking and discussion.

Consumers under Debt Review will not qualify under the proposed debt extinguish program.

Treasury is supporting the proposal of the permanent extinguishing of the unsecured debt of over-indebted people by saying that it should be a once-off intervention. The group of people who are be eligible for this are individuals with gross monthly income of not more than R7,500, who have no readily realizable assets (excluding exempted items), are not subject to debt review and have unsecured debt that is less than R50,000.

In other words, a debt intervention applicant may apply once to the National Credit Regulator in the prescribed manner and form for a debt intervention, if that debt intervention applicant has at 24 November 2017, a total unsecured debt owing to credit providers of no more than R50,000.

The debt intervention targets relief from unsecured debt, specifically lower value loans to lower-income consumers.

According to the current proposal, credit providers will be tasked with reviewing all the credit agreements of the consumer from other credit providers. This would require the consumer to request these documents from all their current providers.

It is envisaged that this process alone may stagnate the industry as it will be very time consuming, for both borrowers and lenders. Once the consumer is in possession of these agreements, the prospective credit provider would then need to review each agreement and determine whether they were granted recklessly at the time when the credit was granted. With early assistance from Accord Debt Solutions consumers sre ready to apply without delay. 

While some credit providers see the bill as negatively impacting the industry, it has the potential to bring the needed relief to financially stressed individuals that have no source of income. SAIPA supports the debt intervention proposed in the Bill, but wants to highlight these crucial aspects so that a fair and just Bill is passed.