12 Nov Are Your Debt Repayments Unfair? CreditBoost Can Help

Have you ever thought that your debt repayments or interest rates are too high compared to what you can afford–that maybe your lender should have never lent you money or assessed your affordability better? This is called reckless credit, and it’s defined in detail in the National Credit Act (NCA).

You can dispute these debt repayments in court using these laws to your advantage, getting some or all of your debt written off. Read on to discover how reckless lending works, how we assess for it, and how you can use it to get your debt written off.

What Is Reckless Lending?

The  National Credit Act of 2005 defines reckless credit as credit granted to a consumer under circumstances described in Section 80 of the Act. This section says a credit agreement is considered reckless if the credit provider fails to conduct a required assessment of the consumer’s understanding of the credit agreement, debt repayment history, and financial means.

A credit agreement is also considered reckless if the credit provider entered into the agreement despite evidence suggesting that the consumer did not understand the terms of the agreement or that it would cause the consumer to become over-indebted.

Before they enter into an agreement with you, your creditor must assess whether you can afford the loan or credit with an affordability assessment, whether you understand the risks and costs associated with the agreement, and assess your existing financial means (income).

An example of reckless lending would be if a shop lets you get more credit on store card when they know you can’t afford it.

What Happens If the Court Finds an Agreement to Be Reckless?

It can set aside all or part of your obligations to the creditor including repayments and interest rates. It can also suspend the agreement (wipe your debt), grant you 0% interest or restructure your obligations under a different agreement, usually one in your favour.

Can a Creditor Defend Against Reckless Lending?

Yes–if your lender can prove that you didn’t fully disclose relevant financial information and that that affected your lender’s ability to accurately assess your affordability or understanding of the agreement.

Is There Any Debt Exempt from Reckless Lending Laws?

School loans, emergency loans, public interest credit agreements, pawn transactions, and temporary increases in credit limits under credit facilities are all exempt from reckless lending law.

How Does Credit Boost Assess for Reckless Lending?

To prove reckless lending, we assess for reckless lending using the same guidelines that creditors must use. We evaluate your general understanding of risks and costs associated with your obligations, your debt repayment history, whether you can afford the debt (income and existing commitments) and whether you’ll likely fall into bankruptcy.

If it comes to light that you weren’t fully made aware of your obligations, didn’t understand your obligations, or that your lender didn’t fully assess whether you would be able to afford the debt, we’ll submit evidence to the court that will get part or all of your debt written off.

Contact Credit Boost for a professional reckless credit assessment. We’ll help you discover a write-off wonder!