Credit regulator proposes laws to limit maintenance defaulters' credit and loan access.
Not paying your maintenance will soon impact your credit health if the proposed law by the Credit Regulator comes into play.
According to Fin24
, parents that are maintenance defaulters could soon be in for a shock should they apply for a loan or credit. The National Credit Regulator has gazetted new affordability guidelines for the credit industry aimed at child maintenance defaulters. The basic regulations include:
• Maintenance defaults will stay on a person's credit record for five years, or until the court rescinds the default judgment;
• Maintenance payments will be included in all affordability assessments completed when applying for new loans;
• Clients are required to declare if they have any maintenance default judgments.
If you are one of those parents who are guilty of not paying your maintenance
then you might find it problematic when trying to apply for credit in future, as most credit providers will review your credit profile on the various bureauxs.The details are out there
The new law will also equip government to track down non-paying maintenance parents by working closely with the credit bureauxs. Credit bureauxs generally have accurate records of where people are living, their latest known address, cell phone numbers, etc.
Most of the non-maintenance paying parents are, according to the report, fathers. Some of these fathers have abandoned their children and cannot be found. In South Africa there are about 48% of children with absent but living fathers
. The mothers of these children are left to raise the kids all on their own, sometimes with limited financial means to do so. The mothers also do not have the ability or knowledge as to how to go about tracking the father and end up not pursuing the matter.Deliberate debts?
It is also sad when the fathers (or mothers) who are not paying maintenance
are doing so out of choice, as these parents have stable jobs and earn a fixed income but ignore their financial responsibility towards their children. Some parents even go to the extent of incurring extra debt just so they can show the court they cannot afford the maintenance.
Perhaps this new law would force these parents to face their responsibility towards their children knowing the negative impact of not paying their maintenance. What is interesting about this possible new law is that it does not just stop at impairing the non-paying parent’s credit record, but goes to the extent of attempting to trace the parents whereabouts as well. It is not clear what will happen once the parent is tracked though, for example, will it lead to an arrest?
There are apparently millions of parents out there though who are not paying maintenance that I have to wonder if government will have the resources to see this legislation through should it come into effect. Disclaimer: The views of columnists published on Parent24 are their own and therefore do not necessarily represent the views of Parent24. The public has 30 days in which to comment on the amended legislation. What are your comments?