18 Jul About Debt Relief Government Programs

Being in serious debt can take a toll on your mental health and financial life. To prevent this, the government has taken measures to relieve and protect consumers against overindebtedness. Some of these measures include debt review, the National Credit Act, and the National Credit Regulator. Most pertinent to this post is the Consumer Protection Act debt relief amendment, which empowers the DTIC to provide debt help systems to vulnerable groups.

In addition, the government has made amendments to incomplete and/or contradictory legislation and is also discussing legislative developments in debt management, such as the debt forgiveness bill. This blog aims to discuss these measures thoroughly, exploring their history, the effect they have had on South Africa’s indebtedness landscape, and what you can expect from the measures. Debt help is here, make use of it!

Government Debt Relief Measures in South Africa

Some of South Africa’s government-powered debt relief measures include debt review, the National Credit Act, the National Credit Regulator, amendments to other legislation, such as the Prescription Debt Act 68, and talks of new legislation, the debt forgiveness bill.

Let’s discuss these in more detail.

Changes in Legislation

Since 2005, numerous amendments have been made to the NCA as a result of conflicting legislation. Some of these amendments include:

• National Credit Amendment Act, 2019 (No. 7 of 2019)
• National Credit Amendment Act, 2014 (No. 19 of 2014)

Before legislation is gazetted, many attorneys reference past cases and nationally referenced law journals to measure a court’s present preponderance to rule a certain way. Recent cases include:

• National Credit Act’s Remedies For The Reckless Credit In the Mortgage (Vol 21) [2018] from the Potchefstroom Electronic Law Journal
• Unintentionally Trapped by Debt Review: Procedural Inadequacies in the National Credit Act 34 of 2005 Relating to Withdrawal from the Debt Review Process (2019)
• The Debt Counselling Process-Closing the Loopholes in the National Credit Act 34 of 2005 (2009)

You can read these for free online using the Southern African Legal Information Institute (SAFLII) database.

Consumer Protection Act Debt Relief Amendment

The Consumer Protection Act, No. 68 of 2008 was written into law to establish clear consumer rights, protect those considered vulnerable in the market, and standardise consumer transactions across the nation, as well as your rights under debt review.

In 2019, President Cyril Ramaphosa signed a new amendment to the legislation. It introduced a government debt relief plan targeted at assisting the most vulnerable to over-indebted individuals. The changes empower the DTIC (Department of Trade, Industry, and Competition) to grant debt relief to people who have experienced job loss or are unable to work. The amendments propose a debt forgiveness strategy to provide crucial financial support to those facing dire circumstances.

Changes in legislation are exciting for everyone. While it may affect creditors, it’s more important that everyday South Africans can financially recover and focus on their families once more.

The National Credit Act

Surprisingly, the NCA (Act 34 of 2005) was only enacted in 2005. It was designed as part of a legislation overhaul and meant to protect consumers in the credit markets while making banking more accessible. The NCA Brochure states that it was brought into being to “promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information,” and more.

The Act introduced a measure made to protect both creditors and consumers in the debt repayment process: debt review. It has since been used by hundreds of thousands of South Africans to repay their debt and avoid legal action.

Debt Review

Debt review was introduced in 2005 alongside Act 43 (NCA) as a means to ensure debtors paid their creditors back in a way that was affordable and fair. It’s a legal process that typically takes 3-5 years, depending on the amount of debt accrued and the consumer’s repayment capacity.

It benefits the consumer by mandating that creditors may not take legal action against debtors while they’re under debt review, they must lower interest rates, and they must extend repayment periods. The process was designed to protect consumers while ensuring creditors get their money.

Reckless Credit

The Act also introduced measures to stop creditors from lending money to people who can’t afford it, aptly named reckless lending. If you are recklessly lent money, you are allowed to go to the authorities, who can order the creditor to write off some or all of the debt. Reckless lending is an offence.

Now that you know about the government’s debt relief measures, it’s time to take action. Take advantage of the benefits of debt review, the most efficient debt relief measure, debt review, today and contact True North Debt.