JOHANNESBURG – The removal of adverse credit information Regulations referred to as “credit amnesty” does not eliminate debt.
There is widespread confusion about the latest credit amnesty. Many consumers believe – incorrectly – that the credit amnesty means they no longer have to repay debts incurred before April 1, the date on which the credit amnesty became effective.
In terms of the credit amnesty, consumers still have to repay all their debts. The credit amnesty is in no way a debt pardon and consumers are urged to continue servicing all their debt obligations.
All the credit amnesty has done is to remove the ‘negative’ information reflected on consumers’ credit reports before April 1. This includes:
• Negative classifications of consumer behaviour, including: ‘delinquent’, ‘slow paying’, ‘absconded’, or ‘not contactable’.
• Negative classifications of enforcement actions, including: ‘handed over for collection or recovery’; ‘repossessed’, ‘revoked’, any ‘legal action’, or ‘write off’ of the debt.
• All paid up civil court judgments where the consumer has settled the capital amount.
The credit amnesty also requires that from June 1, all paid up judgments are to be removed from the credit bureau records on an on-going basis, which gives consumers an incentive to pay off their debts. Currently, judgments are removed after five years, or earlier if rescinded by a court.
From June 1, when a consumer has paid up their debt and proof of payment has been provided from the credit/service provider, the judgment will be removed within seven days. The consumer will no longer need to go through a court process.
