Reading Time: 2 minutes

Credit Amnesty  Confusion

The proposed credit bureau amnesty has confused many consumers. The truth is they don’t understand what will happen and how it will effect them. Note what one Debt Counsellor (and Debtfree Reader) told us about what he has seen:

” I went to this company yesterday to tell employees how debt review can help them get out of debts. They couldn’t wait to apply and were fighting to get forms before one another. I had only 8 application forms with me and promise to bring more the following day.

To my disappointment when i returned the enthusiasm they had yesterday seemed to have faded away. They told me they see “no point” applying for debt review because they heard on tv news (on SABC1) that the government is going to “grant them amnesty” and they will no longer be “obliged to pay their debts”.

To their understanding this credit amnesty means their debts will be written off or “cancelled”.

Knowing the proposed amnesty very well and had been following every step of it since October last year I tried to speak facts to these employees about the amnesty and managed to explain it to quite a few who need help. This means a new task for not only Debt Counsellors and creditors but all role-players (especially the media) to explain with clarifying to the general public (especially to over-indebted consumers who need to apply in terms of Sc 86(1) of the National Credit Act) that this amnesty is about removal of names and certain account info from credit bureau records and not a cancellation of debts.”

This story is unfortunately not unique.

It seems that no matter how many times people are told they will still have to pay their debts the word ‘amnesty‘ creates the thought that they won’t. This will no doubt result in a series of delinquencies and defaults in payments should the amnesty go ahead. It seems that there will have to be a huge amount of money spent to ensure that consumers are made aware of the realities.