You know that little voice in your head that keeps telling you that your massive debt problems are not your fault? Well… if it is not the same voice telling you to keep spending and splurging on new shiny accessories or a new pair of shoes, then it may have a point.
Reckless lending occurs when a credit provider:
1. Does not conduct an affordability assessment.
2. Conducts an affordability assessment but can assess;
- That the consumer is going to be over-indebted in the future;
- That the consumer will be over-indebted if afforded the credit;
- That the consumer is already over-indebted
If your agreement with the credit provider is found to be reckless lending the Court will; make an order to set aside all or part of the consumer’s obligation and then suspend the credit agreement. When the court makes this decision you do not have to make any further payments to the responsible credit provider and your loan may be written off.
The credit provider may not demand any payment from you, which means no interest fee or any other charge under the agreement may be charged to you. The credit provider did not do a proper assessment when assessing you for credit and in return you became over-indebted.< Back to FAQ's