What is Debt Counselling ?
Debt Counselling was introduced in 2007 and is governed and regulated by the National Credit Act 34 of 2005. Under section 86 and 87 of the national credit act, a consumer may approach a debt counsellor to be placed under debt review if he/she is unable to pay his debts in a timeous fashion.
A debt counsellor is a person who is trained and accredited by the national credit regulator to deal with debt review matters. They negotiate lower interest rates, lower installments and longer terms with credit providers. The debt counsellor restructures all the consumer’s debts and consolidates them into one lower monthly payment.
You have a legal right under the National Credit Act to have your finances re-arranged so that you are able to make payments that you can afford. These days loans are so easy to obtain which often results in unrealistic repayment terms. We at Registered Debt Counsellors are dedicated to saving homes and cars from repossession and we strive to get consumers out of debt. Even if you are blacklisted or behind on any loan repayment, we may be able to assist you.
The first step is assessing whether you are over-indebted. A common sign would be when there is little or no money left at the end of the month after paying for your monthly debt obligations. Currently more than 11 000 000 consumers are over-indebted and have missed three or more payments.
After an assessment is conducted with you, we will be able to determine the best solution to your debt problem.
WHAT DOCUMENTS WILL YOU REQUIRE?
We will require your id, payslip and 3 months bank statements.
WILL I HAVE TO OPEN A NEW BANK ACCOUNT?
We advise our clients to open a new bank account as this prevents “money grabbing by credit providers”. Some credit providers will still try to debit your bank account even after we notify them that you have applied for debt counselling. Opening a new bank account will ensure that only one debit order goes off your account.
CAN I ACCESS FURTHER CREDIT WHILST UNDER REVIEW
Whilst under deb review, you cannot take out further credit. The reasoning behind it is that you should clear out all debt before looking to take out any further loans.
CAN MY ASSETS BE REPOSSESSED?
Your assets cannot be repossessed under debt review. You are granted legal protection through-out the process provided you maintain your monthly payment to your credit providers.
WILL I NEED TO COME IN FOR A CONSULT?
You will not be required to come in for a personal consultation. The entire process can be finalised over the phone and by email.
HOW WILL MY FEES BE PAID?
The National Credit Regulator regulates the fees that may be charged for debt counselling. The first month goes toward the debt counselling fee up to a maximum of R6000. The second month goes to legal fees as an attorney is required to represent you at court to obtain an Order. This Order will grant you legal protection and will confirm the payment plan that your debt counsellor has recommended.
I AM MARRIED IN COMMUNITY OF PROPERTY. WILL MY SPOUSE ALSO NEED TO SIGN?
The law at present requires a joint application to be made if a consumer is married in community of property. Spousal consent will therefore be required. If you are married with an anti nuptial contract then a single application may be made.
WHAT IS A COURT ORDER?
After the debt counsellor has finalised your debt review proposal, he or she will forward it to an attorney. The attorney will draft an application to Court and will request the Magistrate presiding over the matter to confirm the payment plan. This will ensure that credit providers adhere to the payment plan and prevents any legal action from being taken against you during the debt review process. Once all your debt is settled , the debt counsellor will issue you with a clearance certificate which will remove you from debt review.
CAN YOU ASSIST IF I AM BLACKLISTED OR IN DEFAULT?
Yes we can still assist. In fact most of our clients are in arrears when they decide to sign up for debt review programme.