Ramaphosa signs controversial debt-relief bill into law

JustAsk

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Personally, I'm not 100% against this idea of assisting people who are overindebted.... but there needs to be consequences. I would have more gone to the point of making the debt review process free and simple for people who are in that position, so that they can work out a payment plan for the existing debt and be barred from generating new debt until that process is complete.
But that is precisely what this plan aims to do. Most media just prefer to focus on the writing off part, which is the last option and capped.
 

ToxicBunny

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But that is precisely what this plan aims to do. Most media just prefer to focus on the writing off part, which is the last option and capped.
I do see that there are other avenues considered in the legislation, but the writing off part should not be in the legislation... or if it is, there needs to be some recompense for the credit provider as long as it isn't a case of reckless lending.
 

JustAsk

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I do see that there are other avenues considered in the legislation, but the writing off part should not be in the legislation... or if it is, there needs to be some recompense for the credit provider as long as it isn't a case of reckless lending.
But writing off has always been part of any country's debt processes. Liquidation, sequestration and estate surrender is all part of a legal path (that can lead )to debt write-off. Credit providers have insurance against bad debts.
 

Polymathic

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Truthfully this is just going to cause the banks to cover up these losses by increasing bank fees and stop providing credit facilities for people earning in and around the minimum wage.

At the end of the day like so many other things it's the middle class going to end up covering up for the shortfall
 

ToxicBunny

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But writing off has always been part of any country's debt processes. Liquidation, sequestration and estate surrender is all part of a legal path (that can lead )to debt write-off. Credit providers have insurance against bad debts.
For specific cases yes, of course..

I'm going very much in the vein of this stuff being implemented to help the "poor" as its being sold.... we're enacting legislation to help them get out of the trap (which is in a way the right thing to do) but the problem itself isn't being solved and that is financial education and responsibility.
 

JustAsk

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Because for a higher earner to go too far is more difficult than for a low earner...

Someone clearing R50k per month can generate R300k debt and still survive relatively ok...

Someone clearing R5k per month can't generate much more than R10k in debt and be in over their heads and still try to survive....
That is a common misconception many have. Lower earners like 5k generally does not have too much debt, and the ones that do have is generally the victim of reckless lending. The middle class and upper is where the problem lies. The more you earn, the more access you have to more credit.
 

rietrot

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So low income earners will be allowed to go bankrupt again and hace their bad debt written off.

This is a good thing. But unfair that it doesn't apply to everyone. The banks should just manage the risk better and not give people that can't pay loans.
 

ToxicBunny

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That is a common misconception many have. Lower earners like 5k generally does not have too much debt, and the ones that do have is generally the victim of reckless lending. The middle class and upper is where the problem lies. The more you earn, the more access you have to more credit.
It very much may be a perception, but one can't help but notice too many of the low earners (and I generally class people at the clearing R10k and below in that bracket myself) as living way way way beyond their means with the clothes they wear and cars they drive... I know of a few people who earn around that figure who drive cars more expensive than mine... and that is the full 33% of their salary at R10k. They also then have clothing accounts for days etc... and it says nothing of the payday loans they get from unregistered lenders regularly.
 

rietrot

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The government just expropriated R20 000 000 000 of other people's money and gifted it to those with an established record of not being able to manage their own money. They must be recruiting.
Bankruptcy used to be a thing. Banks the lend recklessly should take the loss.
 

Daruk

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Anyone planning to shift their debt into their spouses name? :whistling:
 

Daruk

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It very much may be a perception, but one can't help but notice too many of the low earners (and I generally class people at the clearing R10k and below in that bracket myself) as living way way way beyond their means with the clothes they wear and cars they drive... I know of a few people who earn around that figure who drive cars more expensive than mine... and that is the full 33% of their salary at R10k. They also then have clothing accounts for days etc... and it says nothing of the payday loans they get from unregistered lenders regularly.
It probably is the case with some folks. In some cases, there's a reason people barely keep their noses above water. Debt is expensive.
 

ToxicBunny

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It probably is the case with some folks. In some cases, there's a reason people barely keep their noses above water. Debt is expensive.
Don't we all know that.... I've just taken on some new debt, and whilst it doesn't come anywhere near making life unpleasant I am NOT entirely happy about doing it.
 

rietrot

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Okay I don't agree that it is a one time write off just for low income earners. It is unnecessary complicated and specific.

We should just allow normal, old fashioned bankruptcy again were the sheriff pitch up, take whatever he cans, and after that the debt get written off and the bank take the loss for their reckless lending.
 

daveza

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But the bill has been criticised by the banking industry, which says it will have a detrimental impact on the ability of banks to be able to lend to low-income customers.
Indeed - if the banks are going to take a knock from lending to the poor , the poor will turn to loan sharks who don't play by the rules.
 

JustAsk

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It very much may be a perception, but one can't help but notice too many of the low earners (and I generally class people at the clearing R10k and below in that bracket myself) as living way way way beyond their means with the clothes they wear and cars they drive... I know of a few people who earn around that figure who drive cars more expensive than mine... and that is the full 33% of their salary at R10k. They also then have clothing accounts for days etc... and it says nothing of the payday loans they get from unregistered lenders regularly.
That i can agree with...
 

CT_Biker

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Non-secure debt is a massive trap. I have one clothing account that I only use every now and again - if managed properly it should never be a stress to cover the monthly installment at month end. The interest rate on these types of accounts are horrendous too, which no one seems to check on, also the fact that these accounts are vetted every six months and most times your credit limit is increased encourages further, reckless spending.

However, the blame falls solely on the individuals who refuse to read the bloody contract, understand the mechanics on how the non-secure credit is calculated, and it is also the individuals who do not know how to manage what and how they spend. Spending, much like drinking and gambling is something you need to do responsibly.

I have also seen many people buying items like Alcohol on credit that scares me. I do not have a Credit card, or an Overdraft. So if I do not have.
 

Kosmik

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It says "unsecured loans" - surely this includes loan sharks as well? Apart from the official loan sharks like wonga etc? And if it is not listed, how would govt clear it?
Unsecured is very broad: credit cards, personal loans, overdraft, everything not backed by an asset like a house or car.
 
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