Answer to a question from a reader

What happens to ZEP holders' bank loans if they are forced to leave SA?

The short answer

Usually a person's debts remain active if they leave the country, but it is unclear what will happen if they are forced to leave, as with ZEP holders.

The long answer

It’s a murky, sorry business. Seemingly the banks are mostly not willing to say outright that ZEP holders’ accounts will definitely be frozen, though several, including FNB, which is apparently the only bank that has been willing to open accounts for asylum seekers and refugees, has “warned” that ZEP holders must apply timeously for other visas in order to keep their accounts open. Some banks have refused to renew ZEP holders’ bank cards.

A skilled ZEP holder who works in IT but has no degree, and thus does not qualify for a critical skills visa, and who also does not have R5-million to invest in a business, wrote in an article for the Mail & Guardian on 2 June 2022, “… as of 31 December, bonds, car loans and even medical aid, life policies and more will be lost as bank accounts are frozen, making it impossible to transact.” says that a frozen account cannot be opened by creditors, so no money can be withdrawn from it. It goes on to say that if your bank account is frozen in South Africa, you have the right to request a written explanation from your bank within 5 days. You also have the right to have the freeze lifted within 10 days unless your bank has good reason to believe that you have committed a crime.

No bank seems willing to actually answer the question upfront of whether Zimbabweans are obliged to pay back loans they took in South Africa if they are forced to leave the country. The banks talk only of loans made in the ordinary way, for example, Nedbank says, “When you take out a loan and sign a credit agreement, you enter into a legal contract. You agree to pay back the amount you have borrowed, as well as the specified interest and costs, within the period of time required. When you don’t pay, you are in breach of contract.”

Generally, a person’s debts remain active even if they have left the country and creditors can try to recoup the debt. (It seems that no one wants to say what the situation is if they were forced to leave, as in the case of the ZEP holders.)

Wishing you the best,

Answered on Sept. 19, 2022, 4:12 p.m.

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