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Debt Counselling

Due to our bad economy, most of the consumers are in a financial difficulty. The risk is also high that consumers lose their assets such as houses, vehicles, furniture etc.
The National Credit Act, protect the consumer from that. This is why it is so important to act in time so that you won’t lose any assets.

WHAT IS DEBT COUNSELLING:

According to Section 86 of the National Credit Act, which was approved by the Government in June 2007, an alternative to Administration and Sequestration are now available for over-indebted Consumers, called Debt Review. This is also the second last option in our country for Debt Relief. Debt Review protects the over-indebted Consumer from aggressive Creditors who are quick to take legal action and are never willing to listen to the Consumers problems or negotiating with the consumer for an affordable solution. In many cases, the consumer and the creditor benefits from Debt Counselling.

The consumer benefits because he/she gets to pay more manageable monthly payments and the Creditor benefits from not having to take expensive legal action, and in most cases not recovering any debt at all. The Banks are also looking for alternatives to repossession, and regularly don’t want to repossess your assets unless they don’t have any other choice. The Debt Review process might take some time for the Debt Counsellor to resolve all the Consumers debt problems, but the Debt Review process must be finalized within 60 working days from the date of application. The Consumer is protected against legal action from day one, and all Creditors have to be notified of your application within 5 working days of application, the consumer has to be registered with the NCR(National Credit Regulator) and the Debt Counsellor negotiate on behalf of the Consumer during the 60 day application period.

The Creditors is more willing to negotiate with the Debt Counsellor than with the Consumer because the Creditor will know that the Consumer is truly over-indebted and can’t afford the monthly instalments when he/she applied for Debt Review. The Creditor will realize that the Consumer is actively taking steps to repay his Creditors by contacting a Debt Counsellor to assist the over-indebted Consumer to structure a repayment proposal and to manage the Consumers debt. The Creditors are aware that the Debt Counsellors have to work according to the rules and regulations of the National Credit Act, which is regulated by the NCR (National Credit Regulator) and is also there to protect the consumer and his/hers legal rights.

APPLICATION FOR DEBT REVIEW:

Any Consumers who apply for Debt Review must complete an application form (form 16) of the regulations. Once we received the Consumers completed application for Debt Review, we will send within 5 working days a notification (form 17.1) of the application for Debt Review to all the Creditors listed on the Consumers application. The consumer will also be registered by the NCR for the Consumers protection by the NCR and all Credit Bureaus will be notified. These notices are sent via Fax, e-mail or registered mail, keeping the necessary proofs. We will thereupon in terms of the Act make an assessment of the Consumers financial position, and should we find that he/she are, then we will work out a new and affordable budget and repayment plan. We will submit a proposed repayment plan to all the Creditors, and attempt to reach a settlement with your Creditors on reduced instalments, interests and capital. Should this fail, we will make an application to obtain a Court Order. The Magistrates Court will make an order that is suitable for the Consumer, forcing Creditors to accept the lesser instalment and extend the periods of the agreements.

According to the Credit Act, the Debt Counsellor has 60 Working days the complete all negotiations with Creditors on the Consumer behalf, and to obtain a case number and Court Date, and in this period no Legal Action can be taken by the Creditors.

Download Form 16 – Debt Review Form

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