How does your Marital Status affect the eligibility to qualify for Debt Counselling in South Africa? This article break down the requirements & criteria.

How does your Marital Status affect the eligibility to qualify for Debt Counselling in South Africa?

1. If consumer is married in COP, the spouse’s income must be included and a joint application made. When the husband and wife who are married COP decline to do a joint application they cannot apply for Debt Counselling.
2. Where a consumer is married in COP but separated or in the process of a divorce a single application cannot be accepted.
3. If the consumers are married ANC or are living together it is recommended that the Debt Counsellor consider a joint view of income. The reason for this is that:

• Both parties enjoy the benefits of joint income. This should be reflected in the budget of the consumer.
• The acquired finance (e.g. bond over a fixed property) may be approved on a joint income.

To ensure that not all debt is being passed to one of the parties whilst the couple continues to live well off a substantial surplus from the other partner. Include all income

When a consumer applies for Debt Counselling all the consumer’s income has to be included. This is defined in Section 78(3) as follows:

“In this part, “financial means, prospects and obligations’, with respect to a consumer
or prospective consumer, includes:

a) income, or any right to receive income, regardless of the source, frequency or regularity of that income, other than income that the consumer or prospective consumer receives, has a right to receive, or holds in trust for another person;

b) the financial means, prospects and obligation of any other adult person within the consumer’s immediate family or household, to the extent that the consumer, or prospective consumer, and that other person customarily:-

• Share their respective financial means; and
• Mutually bear their respective financial obligations; and

c) if the consumer has or had a commercial purpose for applying for or entering into a particular credit agreement, the reasonably estimated future revenue flow from that business purpose.”

It is recommended that Debt Counsellors obtain a full picture of the total income of the household. To achieve this it is important to understand who is part of the household and what their income is. This will assist the Debt Counsellor to determine the proportional responsibility of household expenses.

The abovementioned can be achieved by including the appropriate contributions to household income or by reducing the applicant’s contribution to household expenses in proportion to household income. Full disclosure of household income is recommended in the debt review process.

Conclusion

In conclusion, this article has emphasized the critical role of household income in South African debt counselling assessments. Whether married in community of property (COP), married out of community of property (ANC), or cohabitating, a complete picture of all income sources within the household is essential. For COP marriages, joint applications are mandatory, reflecting the shared financial obligations.

Even in cases of separation or divorce within a COP marriage, a single application is insufficient. While joint applications aren’t required for ANC marriages or cohabitating couples, debt counsellors are strongly encouraged to consider the total household income due to shared benefits, joint financial responsibilities, and the need to prevent unfair allocation of debt.

By obtaining a comprehensive understanding of all income streams, debt counsellors can accurately determine proportional responsibility for household expenses and develop a realistic and sustainable debt repayment plan. Full disclosure of household income, as defined by Section 78(3) of the NCA, is therefore not just recommended, but vital for a successful debt review process.