Affordability Assessment

The affordability assessment is the maths that proves over-indebtedness. It compares the consumer's net income against actual living expenses and existing debt obligations to produce a single figure: what they can realistically pay creditors each month after essentials.

The biggest issue is under-declared expenses. Consumers routinely forget school fees, medical co-payments, transport for dependants, or annual costs like vehicle licensing. An assessment that misses these creates a proposal the consumer cannot sustain, which leads to default and termination later.

Credit providers test the figures. Bank statements, payslips and proof of expenses all get cross-checked. A creditor that finds an unsupported expense will challenge the entire proposal, not just that line item, so we document every figure with primary evidence before submission.

Statutory basis: National Credit Act s 79 (over-indebtedness) and s 81 (consumer credit affordability). Annexure B sets the methodology the courts now expect.

• 1.1
  The purpose of the Affordability Assessment of the consumer
• 4
  Determination of Nett Income
• 5
  Determination of Reasonable Living Expenses