Posts Tagged ‘Councelling’

What is Debt Review?
Under Debt Review a Debt Counsellor will investigate the financial position of the consumer. If it is determined that the consumer is experiencing difficulty in meeting all his Financial Obligations the Debt Counsellor may propose a

Debt Re-arrangement Solution to all credit providers, or make a proposal to the Magistrate’s Court to re-arrange the consumer’s obligations.

What does debt counselling mean?
Debt Counselling is a solution for over-indebted borrowers that ensures sufficient protection against loss of assets and assists with the Restructuring of Debt so that the consumer can meet his / her basic living expenses.

Who can apply to go under debt review?
Any person that is over indebted and that earns an income can apply for Debt Review.

When is a person over indebted?
A person is over indebted when after paying for essential living expenses (like groceries, transport and water and electricity) there is not sufficient funds available to pay for all the monthly installments on Debt.

I am a business owner; can I apply for Debt Review?
Business owners are more than welcome to apply for debt review. Unfortunately no business accounts can be placed under debt review however, the good news is that your personal debt can go under debt review.  Taking care of the personal debt will also result in taking the pressure off the business by creating more cash flow in paying Business Debt Obligations.

How long does it take for my situation to improve?
There will be immediate relief because of the fact that your creditors will be paid at a rate that is affordable to you.

In many instances Debt can be paid off quicker than initially due to clever calculations where the Debt with the highest interest rate gets paid off the quickest.

How can you as a client benefit from our Debt Counselling Service?

• We determine whether you are over indebted.

• We calculate new repayment terms.

• We negotiate Reduced interest fees and extended payment terms with your Creditors.

• We make recommendations to credit providers and or Magistrate courts on your behalf.

• We stop Creditors from taking Legal Action against you during the Debt Review Process.

• We issue you with a Clearance Certificate for the accounts paid up in full.

What accounts can be included in a Debt Review process?
Home loans, vehicle finance, credit cards, overdrafts, store cards, personal loans and micro-loans.

Service agreements such as cellphone arrears or Ekurhuleni arrears can only be included if the account is with an attorney for collection.

What happens if I loose my job while I am under Debt Review?
You must inform us of the situation immediately so that it can be communicated to your creditors. Most of the time they will give a 2 to 3 month grace period in which you can look for an alternative job. If you can’t find a job, your Debt Review Program will unfortunately be cancelled.

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?
Once again you have to inform us upfront of the period that you will be on maternity leave. We will then inform your creditors of a change in your circumstances and restructure your debt for that period of time.

Can I be removed from Debt Review before all my accounts are paid up in full?
Yes, as long as all the Debt in arrears is up to date. We will then issue you with a Clearance Certificate for the accounts that have been paid in full.

If I am married in community of property, does my partner have to go under Debt Counselling too?
Yes if married in community of property you are one estate and therefore there will be a joint application.

Can I apply for more credit or use my credit cards while under Debt Review?
Under no circumstance.  If you do take out credit during the plan then there will be serious repercussions. The Credit Providers will terminate your Debt Review and continue with Legal proceedings.

What will happen if a creditor lends the consumer money while the consumer is under Debt Review?
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.

Will I be black-listed if I go under Debt Counselling?
No. There is no Black-listing but your credit record will get flagged on the Credit Bureaus, indicating to Creditors that you are under Debt Review, and may not make any further Debt. This will be removed once the Debt has been repaid and when the consumer is no longer Over-indebted.

Can I still go under Debt Review if I have been black-listed by a creditor?
Yes, you can be placed under Debt Review at anytime, provided a Debt Counsellor has declared you Over-indebted.

Will Creditors continue pursuing me for payment?
Once we’ve notified your Creditors that you are under Debt Review all legal proceedings have to stop. Unfortunately there are always a few culprits who keep on harassing the clients.  If they do call you, inform them that you are under Debt Review, and refer them to the Debt Aid Debt Counsellors.

What happens if I receive a Letter of demand (Section 129)?
You have less than 20 working days to see a Debt Counsellor for help. Debt Counsellors can make arrangements on a Letter of demand or Warrant of execution but if a Court judgment has been taken there is not much that can be done.

What is the difference between Debt Counselling, Administration and Liquidation?
Debt Counselling: is where a Debt Counsellor restructures installments to allow the consumer to pay his or her debt and meet his / her basic living expenses. Debts are paid monthly, and as soon as all debts are paid, we issue a Debt Clearance Certificate, and client will be removed from the Credit Bureaus.

Administration: is a Legal Process, where the installments are reduced, but Creditors only receive payment every three months and the term of repayment is much longer than under Debt Counseling. Debt must be less than R50 000 to qualify.

Liquidation: is a Legal Process where you are required to own assets, which will be sold to cover your debt. This process is costly and you will be blacklisted for up to 30 years or until the Court declares you as Rehabilitated.