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Finwise Adjusts 103(5) tracking

When an account goes into default (it is not paid what is required contractually) then it sets in place a limit on the amount of debt that will ever be paid back called Induplum (NCA Section 103(5)). This means that the consumer will only ever have to pay double the debt owed at the time. 

Eg. The consumer owes R5000. The induplum limit (in terms of NCA Section 103(5)) is R10 000 in total on all repayments including any payments of fees or legal costs or interest.

Normally, most debts are settled before the induplum limit is reached. This is because consumers pay regularly and they pay off both the interest and fees as well as the principal debt quickly.

When some debts are considered at the start of a debt review however (and where consumers can only pay a very small amount towards a debt over time) then the balance of what is paid can eventually make it all the way to the 103(5) in duplum limit. At that point, the consumers’ legal obligations towards paying the debt are finished. The debt is considered settled or extinguished. Credit providers should not try to make a consumer pay more than this limit. Some do, but they should not and consumers can refuse to pay and if ever pressed about it can defend the matter at court even showing the math.

For Debt Counsellors Using Finwise

Finwise is a software suite used by many Debt Counsellors to help calculate and allocate funds towards debts in debt review. 

Recently the system was updated to make use of a certified COB balance (the balance sent by credit providers to a debt counsellor at the start of a debt review) as the amount used for induplum (section 103(5)) calculations. If the balance is later updated, Debt Counsellors are warned, this will cause the system to lose track of that original COB point and the system will use that new balance for trying to work out the double up or induplum limit.

Normally, such minor adjustments would be made right at the start of the process but if made significantly later this may mean that the induplum limit the software uses will shift and Debt Counsellors should be aware of this.

The system has been updated to provide Debt Counsellor users with a small notification to this effect.