We have extensive experience in the Debt Counselling environment and through answering an array of questions from either Debt Counsellors or over-indebted Consumers directly over time we have built a sizeable bank of Frequently Asked Questions. We encourage you to review some of the Frequently Asked Questions that could be relevant to your individual need.
Debt Counselling is a professional service provided for over-indebted consumers. It is a process regulated by the new National Credit Act and provides you, the consumer, with greater protection against creditors threatening to take legal action.
The goal of Debt Counselling is to develop a repayment plan that is affordable to you and acceptable to all of your creditors. This repayment plan will still allow you to meet your basic living expenses. The process with the creditors is managed by your appointed Debt Counsellor who represents your best interests.
A Debt Counsellor will help alleviate your financial strain; they’re in a position to negotiate new debt restructure schemes, timescales and even interest rates with credit providers. New debt restructure repayment amounts will be based on what funds you have only after your necessary expenses have been paid – ensuring that your debt becomes affordable for you and your family.
Debt Counselling can provide you with the relevant skills and information necessary to avoid further accumulation of debts by focusing on credit card processes, money management and the use of cash over credit.
Most importantly it provides you with an opportunity to regain control over your debt and your life – to look to the future, safe in the knowledge that you’ve learnt from the past.
All secured lending such as property and vehicle finance can be included in the Debt Counselling application except where judgment has been obtained or a Section 129 Notice has been issued.
Unsecured lending such as credit cards, store cards & personal loans must also be included in the debt review application.
Service agreements such as cellphone contracts, levies in arrear, electricity bills, pharmacy accounts, school fees etc. are not included in the debt review process.
No, the Debt Review process does not provide you with payment holidays. You must make monthly payments from the first month you apply. If you fail to make your monthly payments you are in default and the Debt Counsellor and/or the Credit Providers could terminate your debt review and you are on risk and your Credit Providers can proceed with legal action.
You will no longer pay your Credit Providers directly. If you under debt review a Payment Distribution Agency distribute the agreed monthly repayments to all your Credit Providers. All payment will thus be made to the PDA Trust account for distribution to your credit providers.
- Married Community of Property: both spouses income and expenses have to be calculated in a joint application and both parties debt to be included.
- Married Antenuptual Agreement: only the over-indebted spouse could apply for debt review although a joint application could be applied for if both parties agreed upon.
- Traditional Mariage: the application for debt review will be seen the same as married COP.
- Living together: both parties can apply for a joint application.
- Debt Counselling is where a Debt Counsellor develop a repayment plan that is affordable for the Consumer and acceptable to the Credit Providers.
- Administration is a legal process, where the installments are reduced, but Credit Providers only receive payment every three months and the term of repayment is much longer than under Debt counselling. Debt must be less than R50 000 to qualify.
- Liquidation is a legal process where assets are sold to try and lessen the debt and the Court will appoint somebody to manage your finances. This is costly and you will be blacklisted for 10 years or until the Court declares you as rehabilitated.
There is an initial R50 consultation fee. Other fees payable to the Debt Counsellor will be in accordance with the scale as provided by the National Credit Regulator and will be included in your installment amounts.
No, because if you are under debt review you will be flagged on the credit bureaus as such until a clearance certificate is issued.
You can apply in conjunction with your Debt Counsellor for a consolidation loan to the relevant institutions however this tends to only be granted in extreme cases.
It is already a Court Order and only a Court can make a change to the Court Order. Consult with your Debt Counsellor to get more information.
Yes, a Consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot include this debt under debt review.
After you have successfully applied for Debt Review and the Debt Counsellor has notified the credit providers.
You will be issued with a letter to this effect from the Debt Counsellor.
No, although you can contact a Debt Counsellor for advice on how to manage your finances better and various options will be discussed.
No, once notification has been given to the credit providers, the accounts will be blocked for further use.
All payments distributions must take place through a registered Payment Distribution Agency, such as the NPDA. Arrangements for bulk or once-off payments can be arranged through your Debt Counsellor or Debt Councelling Administration office. You must contact your Debt Counsellor to make arrangements and restructure your repayment plan.
No, Administration is a parallel legal process with similar outcomes.
It is a conflict of interest and forbidden by the National Credit Act.
The Credit Provider will submit a counter proposal and the Debt Counsellor will consult with you for an increase repayment amount.
If not affordable, the Debt Counsellor will refer the matter to a Court for a decision. There are risks involved, both financially and legally which your Debt Counsellor will explain where applicable.
You can read more about the National Credit Regulator (NCR) on their website at http://www.ncr.org.za/. For more information about the National Credit Act, visit http://www.ncr.org.za/the_act.html.
A credit bureau is a company that gathers information and updates each Consumer’s credit history. A credit bureau creates a record of a Consumer’s credit information indicating how the Consumer manages his/her credit.
A Consumer can obtain a credit report free of charge once a year by calling Experian on 0861 10 5665 or Transunion on 0861 482 482.
Yes, during the debt review period, your name will be listed with the Credit Bureau’s as being under debt deview. Once the debt has been repaid the Debt Counsellor will issue a clearance certificate and instruct the credit bureau to remove the Debt counselling notation from your record. This means that all records that you were under debt review will be removed. Once this process is completed you should be able to access responsible new debt if required.
No, there is no black-listing but if the Debt Counsellor finds the Consumer to be over-indebted, they will add a flag to the Consumer’s credit record indicate to Credit Providers not to provide you further credit because you are already over-indebted. The flag will be removed once the debt has been repaid and when the Consumer is no longer over-indebted.
The moment you are no longer in arrears and have paid off most debt excluding bonds, the Debt Counsellor will remove you from Debt Review and notify credit bureaus that you are no longer under Debt Review or over-indebted even though you may still have to pay off your bond. It is a sign that you are financially sound.
Yes, you can be placed under Debt Review at any time, provided a Debt Counsellor has declared you over-indebted.
Debt Counselling is a professional service provided for over-indebted consumers. It is a process regulated by the new National Credit Act and provides you, the consumer, with greater protection against creditors threatening to take legal action.
The goal of Debt Counselling is to develop a repayment plan that is affordable to you and acceptable to all of your creditors. This repayment plan will still allow you to meet your basic living expenses. The process with the creditors is managed by your appointed Debt Counsellor who represents your best interests.
A Debt Counsellor will help alleviate your financial strain; they’re in a position to negotiate new debt restructure schemes, timescales and even interest rates with credit providers. New debt restructure repayment amounts will be based on what funds you have only after your necessary expenses have been paid – ensuring that your debt becomes affordable for you and your family.
Debt Counselling can provide you with the relevant skills and information necessary to avoid further accumulation of debts by focusing on credit card processes, money management and the use of cash over credit.
Most importantly it provides you with an opportunity to regain control over your debt and your life – to look to the future, safe in the knowledge that you’ve learnt from the past.
All secured lending such as property and vehicle finance can be included in the Debt Counselling application except where judgment has been obtained or a Section 129 Notice has been issued.
Unsecured lending such as credit cards, store cards & personal loans must also be included in the debt review application.
Service agreements such as cellphone contracts, levies in arrear, electricity bills, pharmacy accounts, school fees etc. are not included in the debt review process.
No, the Debt Review process does not provide you with payment holidays. You must make monthly payments from the first month you apply. If you fail to make your monthly payments you are in default and the Debt Counsellor and/or the Credit Providers could terminate your debt review and you are on risk and your Credit Providers can proceed with legal action.
You will no longer pay your Credit Providers directly. If you under debt review a Payment Distribution Agency distribute the agreed monthly repayments to all your Credit Providers. All payment will thus be made to the PDA Trust account for distribution to your credit providers.
- Married Community of Property: both spouses income and expenses have to be calculated in a joint application and both parties debt to be included.
- Married Antenuptual Agreement: only the over-indebted spouse could apply for debt review although a joint application could be applied for if both parties agreed upon.
- Traditional Mariage: the application for debt review will be seen the same as married COP.
- Living together: both parties can apply for a joint application.
- Debt Counselling is where a Debt Counsellor develop a repayment plan that is affordable for the Consumer and acceptable to the Credit Providers.
- Administration is a legal process, where the installments are reduced, but Credit Providers only receive payment every three months and the term of repayment is much longer than under Debt counselling. Debt must be less than R50 000 to qualify.
- Liquidation is a legal process where assets are sold to try and lessen the debt and the Court will appoint somebody to manage your finances. This is costly and you will be blacklisted for 10 years or until the Court declares you as rehabilitated.
There is an initial R50 consultation fee. Other fees payable to the Debt Counsellor will be in accordance with the scale as provided by the National Credit Regulator and will be included in your installment amounts.
No, because if you are under debt review you will be flagged on the credit bureaus as such until a clearance certificate is issued.
You can apply in conjunction with your Debt Counsellor for a consolidation loan to the relevant institutions however this tends to only be granted in extreme cases.
It is already a Court Order and only a Court can make a change to the Court Order. Consult with your Debt Counsellor to get more information.
Yes, a Consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot include this debt under debt review.
After you have successfully applied for Debt Review and the Debt Counsellor has notified the credit providers.
You will be issued with a letter to this effect from the Debt Counsellor.
No, although you can contact a Debt Counsellor for advice on how to manage your finances better and various options will be discussed.
No, once notification has been given to the credit providers, the accounts will be blocked for further use.
All payments distributions must take place through a registered Payment Distribution Agency, such as the NPDA. Arrangements for bulk or once-off payments can be arranged through your Debt Counsellor or Debt Councelling Administration office. You must contact your Debt Counsellor to make arrangements and restructure your repayment plan.
No, Administration is a parallel legal process with similar outcomes.
It is a conflict of interest and forbidden by the National Credit Act.
The Credit Provider will submit a counter proposal and the Debt Counsellor will consult with you for an increase repayment amount.
If not affordable, the Debt Counsellor will refer the matter to a Court for a decision. There are risks involved, both financially and legally which your Debt Counsellor will explain where applicable.
You can read more about the National Credit Regulator (NCR) on their website at http://www.ncr.org.za/. For more information about the National Credit Act, visit http://www.ncr.org.za/the_act.html.
A credit bureau is a company that gathers information and updates each Consumer’s credit history. A credit bureau creates a record of a Consumer’s credit information indicating how the Consumer manages his/her credit.
A Consumer can obtain a credit report free of charge once a year by calling Experian on 0861 10 5665 or Transunion on 0861 482 482.
Yes, during the debt review period, your name will be listed with the Credit Bureau’s as being under debt deview. Once the debt has been repaid the Debt Counsellor will issue a clearance certificate and instruct the credit bureau to remove the Debt counselling notation from your record. This means that all records that you were under debt review will be removed. Once this process is completed you should be able to access responsible new debt if required.
No, there is no black-listing but if the Debt Counsellor finds the Consumer to be over-indebted, they will add a flag to the Consumer’s credit record indicate to Credit Providers not to provide you further credit because you are already over-indebted. The flag will be removed once the debt has been repaid and when the Consumer is no longer over-indebted.
The moment you are no longer in arrears and have paid off most debt excluding bonds, the Debt Counsellor will remove you from Debt Review and notify credit bureaus that you are no longer under Debt Review or over-indebted even though you may still have to pay off your bond. It is a sign that you are financially sound.
Yes, you can be placed under Debt Review at any time, provided a Debt Counsellor has declared you over-indebted.
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