Debt review, also known as debt counselling, it is a debt relief measure in South Africa that helps over-indebted consumers get out of debt. The National Credit Act (NCA) introduced the process in 2007 to prevent consumers from being blacklisted and having to deal with the consequences thereof. The process is ideal for South Africans with […]
The mere fact that you are reading this means that you will most probably benefit from Debt Counselling. The golden rule is: do not wait too long before contacting us! The earlier you come to us, the easier it will be for us to find a solution for you. You can only benefit from contacting us.
The primary requirement to qualify for debt review is that your expenditure exceeds your income. If you are struggling to make ends meet at the end of each month and are you finding that you are in arrears on your financial commitments, there is a strong likelihood that you are eligible.
Please contact us for a confidential assessment to determine if you qualify. Remember it is important to act as soon as possible before your credit providers start legal proceedings against you and repossess your assets.
Your unique payment plan takes into account your actual living expenses and ensures that you are able to afford to pay these every month.
We provide you and your assets with immediate protection once we have received your application. You are then registered with the National Credit Regulator and your credit providers are notified that you are now protected under the debt review process.
You can get a credit report at any of the credit bureaus. This can be done for free every year.
No. In fact, Debt Review saves your home and/or vehicle. However, this will depend on your unique circumstances.
Factors that will determine this includes:
Have you received a Section 129 letter from your Credit Provider; and, if so, how long ago? If you are not under Debt Review and you receive a Section 129 letter from your Credit Provider, you will have 10 working days (As per the notice) to obtain the services of a Debt Counsellor, who will endeavor to save the asset.
Have you been served with a summons in respect of your mortgage bond or vehicle finance?
How many vehicles do you have and what are they used for? For example, quad bikes and jet skis may be regarded as luxury vehicles, therefore, may have to be returned to the bank.
In essence while you are under debt review and continue to pay your restructured installment, creditor providers are prohibited from taking further legal action or attaching your assets. The bottom line remains that you will always be in a better position to keep your home and vehicle while you are under Debt Review, rather than trying to fight off the Creditors yourself.
When you sign a loan agreement, you commit to a contract. This contract gives your credit provider the rights to your vehicle until it’s paid off. Failing to fulfil your obligations gives your credit provider the right to take back the vehicle.
Usually, the car is repossessed if you’re about 3 months in arrears with your payments. Your credit provider may obtain a court order to repossess the car or take it through a voluntary surrender.
Repossession is when your credit provider takes your car because you’ve failed to keep up with your payments. Before the car is taken, the credit provider has, in most cases, warned that payments are not up to date.
Voluntary surrender occurs when you let your credit provider know that you can no longer afford payments on the car and agree to give up the car. Although you still lose the car, surrendering it voluntarily is less stressful than repossession.
Both repossession and voluntary surrender will affect your credit score negatively. But, voluntary surrender is often seen as more favourable when it comes to your credit score because it shows that you chose to communicate and cooperate with your credit provider – as opposed to waiting for your creditor to take action against you.
Once the car is taken, it is safely stored for a specified amount of time. You are given a final opportunity to catch up on your payments as well as pay all administrative and legal costs.
If you cannot settle the amount, the car is put up on a public auction. Once the car is sold to the highest bidder, you are liable for any amount that falls short of the car trade book value. For example, if the car’s trade book value is R100 000 and the highest offer on the day of the auction is R80 000, you are liable for the R20 000 difference/shortfall.
Debt review protects you from losing your valuable assets, such as your car, provided you apply before it’s too late. As soon as you apply for Debt Review, your creditors are notified that you are under debt review within 5 days. They must, by law, communicate with us and stop all communication with you. Once you are under debt review you are protected by the NCA and creditors cannot take legal action against you or go to court to have the vehicle repossessed, provided that you maintain your new payment arrangement/commitment.
Although debt review is extremely effective, especially in the long run, it’s important for you to know what to expect during your journey to financial freedom. To help you make an informed decision about whether to apply for debt review, here’s a list of the advantages and disadvantages of debt review.
Knowing what happens once you’ve completed the process is important. In case you were wondering, there is life after debt review! And, we can safely say that you will be way better off financially once you’ve paid off all of your debt.
If you’ve completed the process, congratulations! You’ve made a very wise decision and have cleared your debt...
Yes. Once you’ve been unflagged, you can apply for credit once again and make purchases, such as for a house or car, under credit. You will not be denied because you were once under debt review. You will have to, however, build up your credit score, like anyone else who wants to apply for credit.
Not at all. Provision is made in your debt repayment plan (Budget) for all your insurance policies. In fact, if you, for example, have vehicle finance, you will be compelled to have insurance on the vehicle.
Our fees are regulated by the National Credit Regulator and are very reasonable, as the idea is to get you out of debt and not to put you further into debt. The fees will be explained to you in detail once you contact us. The important thing to remember here is that our fees and disbursements are included in your affordable debt repayment plan.
No. We never contact clients at work unless asked to do so. Confidentiality is guaranteed
In order to be placed under Debt Review, you have to have a monthly income that puts you in a position to make a reasonable offer to your Credit Providers. Therefore, if you are unemployed and you do not receive any other income, like rental income or pension, Debt Review is not the ideal solution for you.
In terms of the National Credit Act, as Debt Counsellors, we are allowed to lower your monthly payments by extending your repayment periods and, in some cases, lowering your current interest rate.
No. The whole process can be finalized telephonically and by email. Therefore, you can contact us no matter where you stay in South Africa.
No, while you are under Debt Review, your Credit Providers cannot “blacklist” you. However, if the “blacklisting” takes place before you apply for Debt Review, it will reflect on your credit record. This is another reason why you should rather apply earlier than later for Debt Review.
No, you do not have to appear in Court as your Debt Counsellor will be the applicant and you will be a respondent. As soon as our attorneys notify us of the outcome, we will notify you of the same immediately.
In the unlikely event that the magistrate requests your presence, it will most likely be to establish certain facts. You will not be questioned by any attorneys or anything like that as this will be a court application and not an action procedure.
It is different for everybody as every situation is unique. In order to lower your monthly instalments, we have to extend your repayment periods. In most cases we manage to convince Credit Providers to lower their interest rates, which means that your repayment period will not be stretched out too much.
Your debt repayment plan will indicate exactly when your last day of payment will be.
You will experience the relief that Debt Review offers immediately. We will work out an affordable provisional repayment plan for you. In terms of the provisional repayment plan, you will make a single monthly payment to a Payment Distribution Agency (PDA). The PDA will distribute the money according to your plan. Your Credit Providers will not be allowed to take action against you during the first 60 working days. During this time, we will prepare your final repayment plan.
Debt Counselling was formally introduced by the National Credit Act to help over-indebted consumers, especially in our current economic crisis. The goal of Debt Counselling is to develop a repayment plan which is affordable to you, as well as acceptable to all your credit providers.
It is there to help you, so why not make use of it?
You pay a single reduced monthly instalment in accordance with your budget and what you can afford. This is made via a Payment Distribution Agent (PDA) who ensures your credit providers are paid timeously according to the restructured payment plan. Only PDA’s registered with the National Credit Regulator are entitled to collect and distribute your funds.
The primary requirement to qualify for debt review is that your expenditure exceeds your income. If you are struggling to make ends meet at the end of each month and are you finding that you are in arrears on your financial commitments, there is a strong likely hood that you are eligible.
Please contact us for a confidential assessment to determine if you qualify. Remember it is important to act as soon as possible before your credit providers start legal proceedings against you and repossess your assets.