Maintenance defaults to affect credit

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IOL pic july9 new rand money Reuters Priority Crimes investigator Carel Lourens said in an affidavit that in March 2011 Mulaudzi ceded the policy to Nedbank in return for R37.6m  the agreed value of the investment at the time.

Cape Town - 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 on Wednesday 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.

The public now have 30 days in which to comment on the amended legislation.

Hill-Lewis said the DA had been told a draft bill would go to Cabinet in the next six weeks, whereafter it would be tabled in Parliament.

Once promulgated, the new laws would also enable government to work in conjunction with credit bureaux to track down maintenance defaulters.

“It's going to enlist the assistance of credit bureaux to track down defaulters who can't be found. A massive problem is that many defaulters simply can't be found,” he said.

“The credit bureaux keep incredibly accurate records about where people are living, their latest known address, their cellphone numbers, and so on.”

Hill-Lewis said the total number of maintenance defaulters was “huge”, but admitted exact figures were hard to come by.

“Anecdotal evidence suggests it is an incredibly widespread problem, affecting millions of families, but we do not have accurate statistics and we're trying to compile these via parliamentary questions and working with the credit bureaux,” he said.

“There are a huge number (of defaulters)... and the record-keeping at the courts is exceptionally poor.”

Hill-Lewis said this problem had been raised by credit bureaux, which reported that it was often extremely difficult to upload judgments from the courts because the records were all written ones.

“Sometimes when the bureaux staff go to the courts, the judgments are kept in a big black bag... all jumbled together. So it is really, really difficult to get accurate statistics.”

However, a sense of the scale of the problem could be got from the fact that a few years ago, the justice department apprehended, over a single weekend, more than 800 maintenance defaulters in Cape Town.

Further, the country's maintenance courts were currently log-jammed, and the NGOs helping with maintenance cases could not keep up with the volumes.

Responding to a question, he said the overwhelming majority of defaulters were fathers.

“It is true there are mothers who are defaulters, but an overwhelming majority... more than 90 percent of maintenance defaulters, are fathers,” Hill-Lewis said.

An estimated nine million children were growing up in single-parent households.

“Almost half (48 percent) the children in South Africa are raised with only one parent.”

Hill-Lewis said his party had been working closely with government agencies, departments and the major credit bureaux for the past six weeks to find a way to increase pressure on parents to fulfil their financial responsibilities to their children.

“We've had exceptional co-operation 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. - Sapa


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