With many South Africans struggling to keep their heads above water given
the financial challenges brought on by the coronavirus (COVID-19), the National Credit Regulator (NCR) has reminded consumers of the measures available to ease the burden.
“The National Credit Act (NCA) offers various debt relief measures for financially embattled consumers struggling to repay debts
and consumers are encouraged to consider these measures where applicable,” said the NCR’s Acting Manager for Education and Communication, Advocate Kedilatile Legodi.
The NCR, which is an agency of the Department of Trade, Industry and Competition, said many South Africans are in financial distress
and struggling to repay debts as a result of reduced and complete loss of income.
Credit Life Insurance Consumers can consider several NCA debt relief measures, including Credit Life Insurance.
This is insurance that a consumer purchases when applying for credit or a loan.
It covers the outstanding debt in the event of unforeseen circumstances such as death, retrenchment, unemployment, inability to earn an income, disability and others.
In the event of the consumer becoming unemployed or unable to earn an income,
the Credit Life Insurance cover provides that credit providers
must settle/pay the consumer’s debt for a period of 12 months or for
the remaining repayment period or until the consumer
finds employment or is able to earn an income, whichever period is shorter.
“Consumers who would like to use this relief measure but are battling to get assistance from their credit providers can send a complaint to the NCR.
However, it is important for consumers to remember that in order to benefit from Credit Life Insurance,
all payments regarding the Credit Life Insurance policy must be up to date,” said Legodi.
Debt counselling/ review Debt counselling is a debt relief measure intended to assist overindebted consumers struggling with debt,
through budget advice, negotiation with credit providers for reduced payments, extension of repayment term and restructuring of debt.
Debt counselling also offers consumers protection against repossession or legal action by credit providers.
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