What the ConCourt garnishee judgment means if you're in debt

The management of the emolument attachment order, popularly known as garnishee, has undergone changes due to a recent Constitutional Court judgment. Now the decision on whether a salary can be attached by a garnishee order can no longer be made by the clerk of the court. Instead, this order has to be made by a magistrate.

The test

The magistrate has two tests to look at: Whether it would be just and equitable to grant a garnishee order and what the debtor will be able to afford.

Debtors still have to pay

The judgment does not in any way mean that debtors no longer have to pay. What it aims for is helping consumers understand financial planning better. It also seeks to ensure the fair and equitable attachment of one’s salary where people can still manage their lifestyles after a debt has been paid off.

What is unsecured lending?

Unsecured lending differs from secured lending in that there are no assets attached to the loan. Banks own your home and your car until you pay the debt in full. If you default they have the asset which they can sell off to recover the debt. As an unsecured loan has no security, the risk is that much higher for the lender so to compensate, a much higher interest rate is charged. These rates can be as high as 38% effectively per annum.

There is another layer added to the control of lending in SA. Magistrates will be involved in deciding on the fairness of attaching your salary to secure the unsecured loan. Affordability will be central to the decision.

Loans are not bad

Loans are not all bad if you can comfortably afford them. If you borrow to get out of debt then you are in trouble. Short term loans can be useful for unforeseen expenses provided you can repay them quickly. Of the current 20 million credit active South Africans half are three months or more in arrears on some form of debt.

The big problem is that they are excluded from borrowing in the future which has a huge affect on the economy.

Be careful

We should tread wearily when considering a loan. The cost of debt diminishes our ability to save. Saving for the future is the only way to improve our financial independence.

Listen to the full conversation below for more information...

Read More
John Robbie tries his hand at comedy

John Robbie tries his hand at comedy

Ex 702 host John Robbie will be starring in an episode of Famous Last Words, a new celeb/comedian show starting on Comedy Central.

World Vision SA wants violence against children be declared a national disaster

World Vision SA wants violence against children be declared a national disaster

Western Cape Premier wants to urgently meet with NGOs to discuss the very worrying spate of child murders in the province.

Male circumcision lowers the risk of HIV for women by 30%

Male circumcision lowers the risk of HIV for women by 30%

This is according to research presented at the recent International AIDS Society Conference on HIV Science IAS 2017 in Paris.

ANC's reaction post motion of no confidence "absolutely shocking" - Verwoerd

ANC's reaction post motion of no confidence "absolutely shocking" - Verwoerd

Former ANC MP Melanie Verwoerd shares her views on the failed motion of no confidence and what she thinks will be the next move.

Health organisations to set up task force against fake medicine in SA

Health organisations to set up task force against fake medicine in SA

The Counterfeits in Medicines Indaba was held in Johannesburg on Friday.

SA  lags behind international breastfeeding standard

SA lags behind international breastfeeding standard

Africa Melane speaks to Jenny Wright, CEO of Human Milk Bank.

Popular articles
Getting to know MP, Dr Makhosi Khoza

Getting to know MP, Dr Makhosi Khoza

Dr Khoza is admired by South Africans for her role in the SABC inquiry as a ANC member of parliament.

10 sexting tips on how to keep things spicy (and safe)

10 sexting tips on how to keep things spicy (and safe)

Interested in sexting but worried about the risks? Dr Eve has created a guideline to help you 'sext' in a fun and responsible way.

It's not the end of the road... Top tips to improve your matric

It's not the end of the road... Top tips to improve your matric

"Recognise that it’s not the end, it’s the beginning." Expert advise for school-leavers who want to improve their results.

Gospel singer Sipho Makhabane explains how Sfiso Ncwane died

Gospel singer Sipho Makhabane explains how Sfiso Ncwane died

Makhabane says Ncwane was feeling weak yesterday and his wife phoned paramedics to check on him.

Who is Advocate Tembeka Ngcukaitobi?

Who is Advocate Tembeka Ngcukaitobi?

The EFF lawyer stole the show during the state capture report court battle.

Meet the founder of Capitec Bank, named ‘Best Bank on Earth and Cheapest in SA’

Meet the founder of Capitec Bank, named ‘Best Bank on Earth and Cheapest in SA’

Michiel le Roux speaks about the fascinating story behind the little bank that has the Big 4 shaking in their boots.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?