Defaulting on child maintenance will affect your credit record

2014-08-06 15:54

Parents who do not pay their children’s maintenance will soon be in for a shock should they apply for a loan or credit.

Last week, the National Credit Regulator gazetted new affordability guidelines for the credit industry aimed at bringing child maintenance defaulters to book.

The draft regulations were hailed by the Democratic Alliance today as “real progress” towards making the estimated millions of such parents, mainly fathers, face up to their responsibilities.

“This is significant. It means that maintenance defaulters will now have their credit records impaired,” DA MP Geordin Hill-Lewis told reporters at Parliament.

The draft regulations include that:

» 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; and

» Clients are required to declare if they have any maintenance default judgments.

Members of the public have 30 days in which to comment on the amended legislation.

“Almost half (48%) of the children in South Africa are raised by only one parent,” Hill-Lewis said.

His party had been working closely with government agencies, departments and the major credit bureaus for the past six weeks to find a way to increase pressure on parents to fulfil their financial responsibilities to their children, he added.

“We’ve had exceptional cooperation from the department of justice ... the department of trade and industry, the National Credit Regulator ... this has been an issue which we’ve all agreed on,” he said.

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