How to be safe from debt - how does the law help with debts?

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How does the law help with debts?

How to be safe from debt - how does the law help with debts?

 

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Before The National Credit Act was promulgated in 2007 consumers had limited choices when they found themselves over-indebted. The law protected creditors more than consumers and did not take into account that sometimes consumers just had bad luck with debts. Consumers could file for bankruptcy or sequestration but had no real way of protecting themselves against ruthless creditors. The government however realised that consumers needed help with debt and gave them the option of debt counselling through The National Credit Act.

 

In terms of the act a consumer who is over-indebted can approach a registered debt counsellor to obtain help with their debts. The debt counsellor has the authority to negotiate with creditors in order to reduce minimum payments and interest. This means that the debt counsellor can take what the consumer has available to pay on debts, and negotiate debt payments down to that amount. Secondly applying for debt counselling provides the consumer with protection against legal action and asset seizure. Provided that a creditor has not already taken legal action, they cannot do so once the application is filed. This means that consumers can pay their debts while avoiding lengthy legal battles with creditors.

 

The National Credit Act of 2007 was created to balance the credit and debt system in South Africa by taking into account consumer interests and creating rights for them. Consumers no longer have to be at the mercy of callous creditors and debt collection calls day and night because debt counselling can put up a wall between the consumer and these kinds of actions.

 

It is pertinent that consumers familiarise themselves with these new laws and understand their rights in order to be safe from debt.

 

Article written by: Andrea van Tonder 06-2013


How to be safe from debt - how does the law help with debts?

How to be safe from debt - how does the law help with debts?           How to be safe from debt - how does the law help with debts? How to be safe from debt - how does the law help with debts?              

 

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