benefit of receiving debt counselling is that nobody could repossess
house or assets whilst you are involved in the process? What many have
misperceived is that counselling removes your obligations toward you
is simply a debt restructuring process that allows you to keep your
assets while settling your creditors over a new negotiated period that
South Africans, like so many of our
counterparts in other developed countries
got carried away with excessive credit and this reckless spending has
to haunt us. For some, so badly that we cannot afford our monthly
anymore. More than 150 000 South Africans are expected to be under debt
counselling by the end of 2009.
step in addressing the situation is forget about the shame issues, to
acknowledge the problem and to be pro-active in solving it. The Debt
process is part of that solution of helping people take control of
counsellors are registered under section 44 of the National Credit Act
2005 and are individuals who have undergone specific training in order
qualify and be registered. When applying for Debt Counselling always
your counsellor is properly registered.
function is ;
a consumer's state of indebtedness
facilitate debt re-arrangement with credit providers
recommendations to credit providers and Magistrate’s Courts on behalf
who, after deducting living expenses from their net salary, has less
over than the instalments on their total debt, may apply for
importantly, is that the applicant must carefully consider their living
expenses and cut back on all unnecessary luxuries.
fee of R50 only for assessment and if the Counsellor agrees that you
over indebted, they will then undertake your case. Fees of up to R4000
payable – but NOT upfront. Their fees will be deducted from your first
instalments. DO NOT make any upfront payments and report anyone who
the first steps?
have an interview with the Debt Counsellor and he or she will explain
process to you, as well as provide you with a written document laying
regulations, steps etc.
also be advised as to what documents you need to provide them, as well
preparing a full budget of your monthly expenses, copies of statements
outstanding accounts and so on.
will then bring with you to your next meeting
Counsellor will asses your situation and concur that indeed you are
indebted or if the debt counsellor finds that the borrower is not
over-indebted, a letter of rejection will be given to the borrower, and
credit providers will be allowed to continue with the legal
person applied for debt counselling, the counsellor had to notify all
credit providers and the credit bureau within five days. The consumer
then not have access to any more credit.
Having found the debtor to indeed be
- The debt
counsellor can make a proposal to all credit providers on how the debt
- In cases
where the credit providers are not prepared to agree to the debt
proposal on how the debt should be restructured, the debt will be
via the court.
- If the
credit agreement is declared reckless, i.e the creditor have credit
certain obligations by the borrower may be terminated or suspended by
- The debts
would then be rearranged by either lowering interest rates, extending
periods or the lender forfeiting the interest and accepting only the
amount agreed to a repayment to your creditor is paid over to the Debt
Counsellor on a monthly basis who will make the necessary distribution.
are undergoing debt counselling, your creditors cannot take legal
against you or repossess the goods you bought on credit.
that you are under debt review is noted on your credit record and
period, you are not allowed to make any more debt.
that debt counselling does not only protect a consumer’s assets but
his/her credit record! A consumer would qualify for credit as soon as
debt was settled and they had obtained a clearance certificate from the
During our economic circumstances of
the last 12 months, we have picked up a lot
of experience in assisting homeowners who felt they have had no option
sell. Please feel free to contact us if no need any assistance or
referral to a
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