Debt Relief Bill – Not All South Africans Can Wave Their Debt Goodbye

President Cyril Ramaphosa signed the National Credit Amendment Debt Relief Bill last week. The objective of the National Credit Act is to promote fair and accessible credit to all South African’s. But will the bill be beneficial for lower-earning consumers in the long run? The new bill could contradict “fair” and “accessible” to all and here’s why…

The new debt relief bill is promising to write off debt for low income and unemployed consumers who are over-indebted, but the application thereof is misunderstood. The bill is of extreme concern to the banking industry and their low-income clients. Only a small fraction of very vulnerable consumers may benefit from this bill after a vigorous vetting process.

The Banking Association of South Africa (BASA) have reached out to President Ramaphosa in an attempt to petition the act, however, their petition was not heard. The group has pointed out to the Presidency that the act is not a sustainable debt relief measure. Nor does it provide a balance between consumers and credit provider rights. According to BASA, the act puts low earning South Africans savings, investments and credit accessibility at risk.

A study by BASA and DTI found that banks would have to increase the cost of credit for high-risk lenders or avoid lending to low-income consumers altogether. This may lead to an unintended consequence of low-income consumers seeking credit from unregulated lenders such as loan sharks. It will also be likely that successful debt intervention candidates will struggle to gain access to credit again after having their debt extinguished, not unless their financial profile drastically improves.

Neil Roets, CEO of Debt Rescue warns that credit providers aren’t going to put up an easy fight either. Court orders will be brought to question, delaying the implementation of debt intervention to their respective consumers.

Although the Debt Relief Bill has been officially signed, there is still a lot of uncertainty around the bill and its intentions…


Here’s what you need to know about the Debt Relief Bill:

You cannot apply for debt intervention at present:

There is no implementation date yet.

The NCR and NCT do not currently have the infrastructure and processes to handle applications yet. And it may be some time before we see progress in this area.

Candidates need to meet strict criteria before applying:

The bill only applies to consumers who have been earning a gross income of below R7 500 for at least 6 months before applying or who have been unemployed for some time.  Applicants also cannot have more than R50 000 in unsecured debt and must be found over-indebted by the National Credit Regulator.

What are the criteria:

  • No realisable assets in their name above the value of R2 000 (unless a tool of the trade) i.e. vehicles or property
  • R50 000 or less in unsecured debt
  • Found to be over-indebted by the NCR
  • A gross income of below R7 500 for at least 6 months before applying


  • Unemployed with no prospect of finding work within 24 months

All other debt relief measures will be taken first before any debt can be extinguished:

Consumers hoping to get their debt written off by simply filling in an application form may have been grossly misled. The NCR and NCT need to take effective measures before writing off any debt. Consumers will be given a time frame to find a means of settling their debt.  Only when all other debt relief measures have been taken, will the debt be considered eligible to be written off.

Further precautionary measures will be taken to try and tackle over-indebtedness:

Successful applicants will need to go through a compulsory financial literacy counselling and financial literacy training. Reckless lending assessments will also become mandatory. Any consumer who is found to be over-indebted when applying for debt relief/review will receive a reckless lending investigation. Credit life insurance will also become compulsory on unsecured debt below R50 000 with a repayment term of more than 6 months.

What are the present options available to over-indebted consumers?

If you fall within the strict criteria outlined above, there is not much you can do about applying for debt intervention until the Debt Relief Bill has been implemented. However, if you think you may be over-indebted and you are struggling to out of debt, then get in touch with a registered debt counsellor such as Debt Rescue today for a free assessment.


10 responses to “Debt Relief Bill – Not All South Africans Can Wave Their Debt Goodbye”

  1. Hi. How do I apply for the BILL relief to see if I qualify please send email to me.

  2. I am unemployed and unable to pay of my debts
    Which is approximately R50 000
    My wife is also unemployed
    We live of small part time errands
    And jobs which last a few days
    This is just enough to pay electricity,school fees,transport,food
    Basic stuff

  3. This is a question and not a comment- 1. A furniture store opens a huge account fora low income employee. 2. The sales person does not verify the income with the employer. 3. The employee not affording to pay as per payment agreement. 4. The sales person has enjoyed the huge commission. 5. The furniture shop states that they would not refuse to give huge credit to the customer. Now that the employee has huge arrears should the shop threaten to repossess? Does the sales approval manager not have an obligation to decline a deal which overburdens the client?

  4. If you earn Less than R7500 and you are still working you don’t apply this debts relief

  5. I am unemployed since April 2018, my daughter pays my bond, other accounts cannot be paid, I have informed foshini i am unemployed i owe 24000, they call me 10tines a say demanding their money, it is not our fault we are unemployed, or we get retrenched govt should set our proper laws to assist unemployed people too.

  6. Hi I m 34 a mother of 3 I m earning less than 7500 still employed but I can settle my debt of 25000 please help

Leave a Reply

Your email address will not be published.

Thank you!

We look forward to the opportunity to get you debt-free!

Did you know?

You can start your application process already. Simply download your assessment or fill in our online application and get one step closer to becoming debt-free with Debt Rescue!

Subscribe to Our Weekly Email

By completing this form, you are providing Debt Rescue with the above personal information and acknowledge the terms of Debt Rescue’s Privacy Notice.