‘Credit amnesty will not remove your debt’

Johannesburg – A poll conducted by one of South Africa’s largest credit management companies revealed that many indebted consumers believed their debt was going to be wiped out on April 1 thanks to the credit amnesty introduced by the government.

Neil Roets, the chief executive of Debt Rescue, said more than one third of the respondents believed their outstanding debt was going to be forgiven.

In a snap poll conducted by his company among existing clients who were under debt review there was widespread confusion.

“It is clear that the many consumers are under the impression that they can stop paying off their outstanding debt because it was all going to be magically wiped out.

“Of the more than 100 of our clients who are currently under debt review that we polled, more than one third believed their outstanding debts would be written off,” he said.

Very few of the consumers polled understood that all it meant was that judgments such as “slow paying”, “delinquent”, “defaulter”, “absconded” or “not contactable” would be removed from credit bureau databases and then only when accounts had been paid in full.

Adverse classification on enforcement actions such as “handed over for collection or recovery”, “legal action” or “write-off” would also be removed once payment had been made in full.

Credit bureaus have until April 30 to remove from the records of those who have repaid their debts any adverse classification of consumer behaviour and adverse classification of enforcement action.

Under the new regulations, credit bureaus must automatically remove this information as soon as a debtor repays a debt.

An issue that had been glossed over, he said, was the fact that many deeply indebted consumers would not qualify for credit amnesty because they still had outstanding debts.

“Only the listings of debtors that had settled their outstanding debts in full will be removed,” Roets said.

“We know South Africans are drowning in debt because many of them come to us for help by being placed under debt review in order to protect their assets.” – Pretoria News

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