When should you resort to getting debt counselling?

[helpwithdebt]

Hi all

The Nca has crcked down on any "credit provider" with the National Credit Act.

What you say is true about the one agreement and the R500 000.

The Act states that you should be registered as a Credit provider if you have either an outstanding book value of R500 000 or more, or a total of more than 100 credit agreements to consumers.

Meaning that if you have one consumer who took a loan of R500 000 you must have a NCRCP number and if you have 100 credit agreements with consumers only lending 50c's each you must have a NCRCP number.

If you dont have the registration required by the Act those agreements of credit can be viewed by a court as a unlawful credit agreement.

Good luck

Stefan

[Dave A]

What I think does need addressing is who gets credit listed (Transuinon or Experian or there is another one). I see the people who get a salary each month without any business expenses get listed quite quickly, but those running their own business with a profit based income are listed very late and CCs and PTY LTD are listed even slower. I guess the creditors still believe a company will eventually pay anyway but an individual my not.

I think people are well aware that listing a business will probably reduce the prospects of them being paid at all. Typically a business is heavily reliant on credit facilities. Having these facilities reduced or removed could well be the fatal stroke.

[helpwithdebt]

My humble opinion is that the listings should be the same for all across the board(personal, trusts, cc's and Pty's) that is after all what the Credit act states. Doesn't happen in practice though. Remember that business entities have a lot more security to offer on default repayments because of the liability of the members and directors collectively and or separate. This means the credit provider can issue summons just about everywhere and on everyone to recover.

As for the listings and the reliability of credit by the business.
that default listing should be there to warn all other credit providers to be careful in lending!

hope it makes some sense, it has been a long day

Enjoy!

[jinxster]

Thats a very good description Dave, but if you ask me, it is a bit of false economy unless there is a good reason for the debt.

This is a very general reply, so obviously situation for situation it is different and it does not apply all the time.

I may think the company will recover and pay me eventually, but, sitting in a recruitment agency position. There are a lot of people registering who have been retrenched with immediate effect. In some cases it is a fallacy. In the past it was a facial tactic applicants use to make there reason for leaving understandable. In the last year, more and more of these stories are coming out and they are checking out.

This leads me to believe, that some people on the 1st of the month, dont actually know it is there last paycheck this month. How can one foresee that unless you had the companies books. It is unfair to knock them first and then the companies who in actual fact started the problem. From the company point of view, the good accountants would of advise, hey guys slow down on the expenses in light of debts, but a salaried person should have peace of mind over that. If they wanted that risk they would be working for themselves anyway.

So my take is, if it were possible, people should stand together so that we can spot the defaulters as quickly as possible. Indirecly, although the defaulter doesn't understand it at the time, in the long run they would be more helped.

[Dave A]

...that is after all what the Credit act states. Doesn't happen in practice though.

Why a credit listing (credit blacklist) system gained traction and what the Credit Act is structured to achieve are two very different things.

Ultimately, no-one wants to blacklist anyone - they just want to be paid the money that's due to them.

Before the NCA a credit listing was a cost effective method to "encourage" payment of an outstanding bill. Once the bill was paid, the listing was removed and everyone got on with their lives.

Under the NCA the effect of a negative credit entry is far more long lasting, and certainly doesn't disappear once the unpaid bills are paid up. So listing a person no longer "encourages" payment...

So where's the benefit to the company making the listing?

[jinxster]

Its a bit of a circle, if you list them, the chances of them creating debt elsewhere is reduced, making the amount owing by them to increase at a lower rate meaning the existing repayments are indeed catching up. Also that other person who now doesn't give credit is less likely to have walls close on him due to non payment, so the economy isn't so badly affected.

You are correct, it doesn't really benefit one self to do the listing, but it could help a fellow business somewhere along the line.