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Proposed Credit Amnesty

The proposed Credit Amnesty which has many Debt Counsellors concerned that they won’t be able to access accurate information about consumers debt could come into effect this year still. Some say as early as October 2013. The debate on the proposed amnesty has been raging for nine months now and the matter still has to be put to Cabinet by the Minister of Trade and Industry if it is to go ahead.

3 options for the Credit Amnesty are being explored:

1) Remove some info on smaller debts and remove history of judgement once they are paid off.

2) Remove all adverse information  once consumers have paid the debts, as well as all paid-up judgments. (The ANC’s preferred option)

3) Remove all adverse info about bad debts and judgement no matter the value (Not the most popular option)

 

None of these options suggest writing off the debts. Consumers will still have to pay there debts but it could mean that the history of bad payments and judgement could be removed and allow consumers to borrow more money.

Industry Concerns

Creditors need to loan money so that they can engage in money creation exercises as recently explained in Debtfree and as brought to the public’s attentions by the DCU, BDCF and NewERA. At the same time they are also worried they might be exposed to more risk sine they will have less information available to judge how reliable a payer the consumer is. The amnesty could be a mixed bag of benefits and risks to creditors.

Debt Counsellors are concerned that this will limit their ability to really see all a consumers debt. It is not uncommon for those who apply for debt review to forget, not know or even hide some debts from the person who is trying to help them.