Debt Counselling is a process that was implemented by the National Credit Regulator to assist consumers that are under financial stress. It is an option that allows consumers to have their monthly installments reduced and their debt restructure by a Magistrate court.
Frequently Asked Questions
Any person that earns an income and is struggling to pay their monthly installments can apply for Debt Review. The debt counselor will then do an assessment to determine whether you are over indebted.
A person is over indebted when they don’t have sufficient funds available to pay all their essential living expenses (like groceries, petrol, water and electricity, etc.) and their monthly debt installments.
Business owners are more than welcome to apply for debt review. Both personal accounts and business accounts can be placed under debt review; however these two are separate processes. (Contact us for more info in this regard)
Firstly you need to get yourself a new debt counselor who is prepared to take you on as a client. With the transfer your previous debt counselor needs to provide you with a transfer letter that includes the name, surname, DC number of the new debt counselor.
All credit agreements example: Home loans, vehicle finance, credit cards, overdrafts, store cards, personal loans and micro-loans and furniture accounts. Service agreements can only be included in certain instances (Contact us for more info).
Your debt counselor will inform your creditors of the change in circumstances, who will most of the time, allow you a 2 to 3 month grace period to find new employment. If you can’t find new employment, your Debt Review Program will unfortunately have to be cancelled, but you can at any time reapply for the debt review process once you earn an income again.
What happens if I have to go on maternity leave while I am under Debt Review and my income decreases for that period of time?
Inform your debt counsellor of the period you will be on maternity leave. Your debt counselor needs to restructure your debt again based on the new information for the specific period of time, and resend it your creditors together with a letter informing them of the change of your circumstances.
Yes, as long as all the Debt in arrears are up to date. If you leave the process without the debt counselor giving you clearance to do so, it will reflect badly on your Credit record.
If you are married in community of property (COP) you are one estate and therefore there will be a joint debt review application. If married ANC you can choose if one or both parties needs to go under debt review.
This is a big no-no. In doing so you are at risk of the whole debt review process being terminated.
The Debt Counselor may refer the matter to court for a declaration of Reckless Lending and the court will then decide what action to take.
No. There is no black-listing but your credit record at the Credit Bureaus will indicating to Creditors that you are under Debt Review. This will be removed once the Debt has been repaid and you are no longer over-indebted.
Yes, you can be placed under Debt Review; however an account where legal action has commenced in the form of a Section 129 (Letter of demand) needs to be excluded from the process, unless the creditor decides differently. All other accounts can be included under the process.
Once we’ve notified your Creditors that you are under Debt Review all legal proceedings needs to stop, however this only happens in the perfect world, and not in the current practice of the debt counselling process. If there is Creditors or debt collectors that keep on contacting you with regards to a particular account, you need to inform your debt counselor thereof, together with the particulars of the person that contacted you.