taken the guesswork out of Debt Counselling. From
important facts to the ins and outs of the debt
counselling process, we’ve covered it all.
is Debt Counselling?
in June 2007 with the implementation of the National
Credit Act, Debt Counselling is a highly effective
credit management solution focussed on helping over-indebted
individuals to meet their commitments in a way that
suits both their Credit Providers and their pocket.
It offers protection against legal action from Credit
Providers and the everlasting effects of being placed
under administration. It also provides individuals
with a way to repay their debts while ensuring that
they still have the ability to meet daily living
expenses. In short, if you are struggling to meet
your monthly repayments and face possible legal
action, Debt Counselling could offer you the solution
of my debt qualifies for Debt Counselling?
where legal action has not commenced can be included
when you apply for Debt Counselling. It is important
to understand this statement. All existing credit
agreements, at the point of application, should
be included. (Not only debt entered into from 1
June 2007). Certain contracts such as Gym Contracts
are not deemed to be credit agreements and cannot
is a Debt Counsellor?
Counsellor may act as a bridge between you and your
Credit Providers in order to alleviate financial
stress. A Debt Counsellor must assess if you are
over-indebted or if any of your credit agreements
are reckless. He/she will use the information provided
by you, but will also verify the information with
the Credit Providers and a Credit Bureau. A Debt
Counsellor is qualified, registered and regulated
by the National Credit Regulator.
is the Debt Counselling process?
process is made up of the following easy-to-follow
the Debt Counsellor with comprehensive details of
your income, monthly budget and debt commitments.
Counsellor will use your information to assess your
Once an initial assessment is completed, and the
information indicates that you are over-indebted,
the Debt Counsellor will contact you.
budget will be drawn up and agreed upon. You will
then be provided with the details of the costs and
your new interim repayment plan. Once those steps
are completed, your application will be accepted.
with credit providers
your credit providers, as well as the Credit Bureau,
are contacted to verify the debt, the repayment
plan will be submitted to the Credit Providers for
approval. This plan may include making use of the
negotiated fee and rate concession’s agreement made
with Credit Providers. The reduction of fee and
rate concessions, as well as the extension of terms,
will assist in the negotiation of a repayment plan.
It is vitally important that a reasonable plan be
of payment proposal
the negotiations are over, a court order will be
obtained from the magistrates’ court. You will then
be well on your way to a less stressful financial
new payment plan
commence payments from the very first payday after
you apply for Debt Review. The agreed-upon repayment
plan will require only a single monthly payment
until your debt has been repaid.
Once you have applied for Debt Counselling, your
Credit Providers cannot commence with any legal
action for a period of 60 business days. This allows
time for the Debt Review process to be completed.
Post loan payment
you have repaid your debt in terms of the rearrangement
agreement, you can request a clearance certificate
from your Debt Counsellor. You’ll then be free to
apply for new credit. All records of the Debt Counselling
and agreements that were covered by it will be removed
from the Credit Bureau.
facts about Debt Counselling
Counselling does not provide you with a payment
holiday. You must make payments every month from
the first month you apply.
the debt repayment period your name will be listed
with the Credit Bureau as being under Debt Counselling.
During this period you will be unable to take on
this process is completed you should be able to
access responsible, new debt if required.
best to ensure that you do not miss any repayments
as this will mean that the process is cancelled
and your Credit Providers are allowed to commence
with legal action.
will it take?
National Credit Act has laid down the following
customer must complete the application for a Debt
Review and all supporting information within 10
Providers have 5 business days to verify information.
entire process has to be completed within 60 business
days, although the Court Order may only come later.
length of time it takes to repay your debts will
vary depending on your unique situation.
the benefits of Debt Counselling?
benefits of Debt Counselling are:
additional charges to consider – Debt Counselling
fees are included in your monthly repayment.
affordable payment per month, which is lower that
payment makes provision for essential living expenses
so you can breathe a little easier.
cost of this process is much less than that of foreclosure,
administration, judgement and sequestration.
National Credit Act protects you from being blacklisted
(if you are not listed already).
the process has been initiated, your Credit Providers
cannot take legal action against you for a period
of 60 days.
is a defined end date to your debt woes in sight,
while you mend your credit profile.
need for further financial stress and at the same
time gain relevant debt management skills to ensure
sustained financial rehabilitation.