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Judgement-Law-Hammer-448x272There 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 1 April 2014, 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 1 April 2014. This includes:

The credit amnesty also requires that from 1 June 2014, 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 Currently, judgments are removed after five years, or earlier if rescinded by a court.From the 1 June 2014, when a consumer has paid up their debt and proof of payment has been provided from the credit/service provider, the judgment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.