The article which follows was written by Neil Daya as an editorial, published in the “Financial Feature” section of the Cape Flats edition of the Peoples Post on 23/02/2016. It contains some interesting information about debt and Debt Review that may surprise a few people :

Using credit and being in debt is common to the majority of us South Africans. The current population of South Africa is approximately 55-million people. According to credit bureau figures, approximately 23.45-million of us are using or have used credit. Despite credit and debt being so widely used, there are many facts about debt that many people don’t know.

• According to the National Credit Regulator, of the 23.45-million credit-active consumers, almost 10-million have “impaired” records (i.e. are in arrears with one or more of their accounts). So, if you’re struggling to keep up with your debt repayments, don’t feel alone ;
• Consumers in South Africa have laws (such as the National Credit Act) which protects them from being exploited. Credit cannot be granted recklessly (i.e. extended to people who cannot afford to pay it back), and interest rates are capped. Even first-world countries such as England don’t have this kind of legal protection ;
• South Africa has more than one Credit Bureau. The major bureaus are ITC (also known as TransUnion), Experian and Compu-Scan. Consumers are entitled to one free credit report from each of them every year ;
• The Law of Prescription also protects consumers from being harrassed to make payments for debts which have been dormant for more than three years (i.e. the consumer hasn’t acknowledged the debt, and the creditor hasn’t taken legal action). Consumers cannot be held liable for payment of these debts i.e. they must be written off ;
• The National Credit Act protects consumers whose accounts are in arrears by limiting the amount of interest and fees that can be added by the creditor. This means that a creditor can’t claim that the R5 000 that you owed them three years ago has now grown to more than R10 000 because of arrear interest and penalty fees.
• The National Credit Act also protects consumers who are over-indebted (i.e. cannot afford their monthly debt repayments), by allowing them to see a Debt Counsellor and apply for Debt Review ;
• If over-indebted consumers apply for Debt Review, it doesn’t matter how far in arrears they are ; the creditor still has to negotiate with the Debt Counsellor to reduce their instalments ;
• Although our credit protection is among the best in the world, be warned : Over-indebted consumers can’t hide from creditors by ignoring them. It doesn’t matter if you don’t open your statements or collect your Registered Mail. The Law says that creditors only have to be able to show that they’ve sent you correspondence, not that you’ve fetched or read it ;
• Debt Review applicants are protected from legal action as soon as they apply. It doesn’t matter if a Debt Collector has already threatened to collect your vehicle or furniture or auction your house ; As long as the creditor hasn’t actually already gone to Court to proceed with legal action, you can still apply for Debt Review and receive that legal protection ;
• Once a consumer is under Debt Review, most creditors will also accept a proposal for lower interest rates from the Debt Counsellor. This is just one of the advantages of Debt Review over Administration ;
• Debt Review clients are not blacklisted forever. Once their debts have been settled, the Debt Counsellor issues a Clearance Certificate and forwards this to the Credit Bureaus so that the consumer’s credit record is cleared.

South Africa’s credit protection legislation is a benchmark internationally, which means that we as consumers are among the best-protected in the world. We will always enounter hurdles in life, but the good news is that there are qualified experts to help you overcome them.