Debt Relief is finally here!

Good news for over-indebted consumers

Nimble welcomes the signing of the long-awaited National Credit Amendment Bill, which aims to provide much-needed relief to over-indebted consumers. The process will be administered by the National Credit Regulator (NCR), although no official implementation date or detailed procedure has been finalised yet. At present, it appears that the window for applications will remain open for four years after the implementation date.

1. Why was the Debt Relief Bill introduced?

• To provide relief to over-indebted consumers
• To ensure more rigorous enforcement of the National Credit Act for credit grantors

2. Who qualifies for Debt Relief?

• Consumers earning a gross monthly income of R7 500 or less over the last six months
• Whose unsecured debt (excluding car finance and home loans) does not exceed R50 000
• Applicants cannot qualify if they have been sequestrated or are under an administration order

3. What is the proposed application process?

• Apply to the National Credit Regulator (NCR).
• Debt Intervention Officers will review the case and notify creditors and credit bureaus.
• The NCR conducts an assessment of your financial situation.
• If you can repay your debts, your application is rejected; If you cannot, the NCR will determine whether you can settle within five years; repayments may be suspended for up to 12 months.
• Eight months later, your finances are reviewed again: If repayment within five years is now possible, the NCR may restructure the debt; If not, you may receive another 12-month suspension.
• After a further eight months, if you still cannot repay, your debts may be partially or fully written off.

4. What happens after your debt is written off?

• You cannot apply for new credit for up to 12 months.
• Your credit record will reflect that your debt was extinguished, which may impact your credit score.

This new legislation represents a major step toward creating a fairer, more sustainable credit environment for South African consumers.