FAQ

Why use Debt Counselling?

Debt Counselling was formally introduced by the National Credit Act to help over-indebted consumers, especially in our current economic crisis. The goal of Debt Counselling is to develop a repayment plan which is affordable to you, as well as acceptable to all your credit providers. It is there to help you, so why not make use of it?

How long will it take before I actually experience relief?

You will immediately experience the relief that Debt Review offers. Within the first 5 days, we will work out a provisional repayment plan for you which you will be able to afford. In terms of the provisional repayment plan, you will make a single payment to a Payment Distribution Agency, who will distribute the money according to your plan. During the first 60 working days, your Credit Providers will not be allowed to implement action against you. During this time, we will prepare your final repayment plan.

How does a Debt Counsellor manage to lower my payments?

In terms of the National Credit Act, Debt Counsellors are allowed to lower your monthly payments by extending your repayment periods and lowering your current interest rate.

What if Debt Counselling is not the ideal situation for my circumstances?

Should we believe that Debt Counselling is not the best option in your particular circumstances, we will refer you to one of our preferred service providers to assist you with the most appropriate process, whether it is mediation, sequestration or perhaps selling your property.

If I am placed under Debt Review, will my Credit Providers still contact me?

As soon as you apply for Debt Review x, we will within 5 days (usually less than 48 hours) notify all your Credit Providers that you are under Debt Review and from that point onward they must, by law, communicate with your Debt Counsellor and not with you directly. It does unfortunately happen from time to time that some Credit Providers take a chance by making contact with our clients directly, but when that happens, you can merely refer them to your Debt Counsellor who will deal with the matter further.

Will I lose my house or my vehicle when I am placed under Debt Review?

Debt Review cannot make you lose your home or your vehicle. It can however save your home and vehicle, but this will obviously depend on your unique circumstances. Factors that will determine this will include the following:

Have you received a Section 129 letter from your Credit Provider, and if so, how long ago? If you receive a Section 129 letter from your Credit Provider, you will have 10 working days in which you can obtain the services of a Debt Counsellor, who will endeavour to save the asset.

Have you been served with a summons in respect of your mortgage bond or vehicle finance?

How many vehicles do you have and what are they used for? Quad bikes and Jet ski’s will for example be regarded as luxury vehicles and might have to be returned to the bank.

Are you giving your full cooperation in the program?

The bottom-line remains that you will always be in a better position to keep your home and your vehicle when you are under Debt Review, rather than trying to fight off the banks yourself.

Can I apply for more credit or use my credit cards while I am under Debt Review?

No. The idea is to get you debt free and therefore you will not be allowed to incur further debt whilst you are under Debt Review. Once your obligations towards your Credit Providers have been satisfied, we will issue you with a clearance certificate and you will be in a position to apply for credit again.

How long will I remain under Debt Review?

It is different for everybody, as every individual’s situation is unique. In order to lower your monthly instalments, we have to extend your repayment periods. In some cases, we manage to convince Credit Providers to also lower their interest rates, which means that your repayment period will not be stretched too much.

Your debt repayment plan will indicate exactly when your last day of payment will be. If you however manage to get a substantial salary raise or inherit a lump some money for instance and you are in a position to pay off all your debt, you can contact us and we will end the Debt Review process on your instruction and inform the Credit Bureaux to remove the Debt Review flag behind your name.

Can I pay more when I am in a better financial position?

That is the ideal situation. You can at any time settle any of your accounts or make an extra payment apart from the payment distribution company distributing your monthly instalment. Just remember to inform your debt counsellor of paid up accounts and updated balances.

Would I have to appear in court in order to make my Debt Review an order of court?

No, you do not have to appear in Court, as your Debt Counsellor will be the applicant and you will merely be a respondent. As soon as our attorneys notify us of the outcome, we will immediately notify you of same.

Can I be “blacklisted” by Credit Providers whilst I am under Debt Review?

No, whilst you are under Debt Review, your Credit Providers will not be in a position to “blacklist” you. If the “blacklisting” took place before you applied for Debt Review, it will however reflect on your credit record. This is a further reason why you should rather apply earlier than later for Debt Review.

Can I apply for Debt Review if I am unemployed?

In order to be placed under Debt Review, you have to have a monthly income that puts you in a position to make a reasonable offer to your Credit Providers. If you are therefore unemployed and you do not receive any other income, like rental income or pension, Debt Review is not the ideal solution for you. There are other solutions available that might be beneficial for you, so you can still contact us.

What happens if I get retrenched whilst under Debt Review?

Unfortunately, this would be a big problem with regards to your Debt Review, as you must make your monthly payments in respect of your debt repayment plan. Should this happen and you do not immediately get another income to satisfy your monthly instalment in terms of your debt repayment plan, you must contact us immediately, so that we can look at an alternative solution or you. We can however include affordable insurance which make provision for 9 instalments should this happen.

What happens if I get into an accident for example and I cannot pay my monthly Debt Review instalment?

The determining factor will be reasonableness. If you can prove that you were not in a position to pay, because you were in hospital for instance, we can send a certain notification to the Credit Providers and in all probability it will be accepted and your Debt Review will continue.

It is very important to note that Debt Review does not provide payment holidays. Debt Review should never be abused in order to evade your obligations.

What are the costs involved?

There is usually a R50 application fee payable with every application. If you apply through Debtfix, the application is free. Because you are experiencing financial difficulty, the monthly instalment which is negotiated between you and your Debt Counsellor, will be the amount for the entire term.

Please note that this instalment will be the minimum payment and can at any time be increased. For the first two months, these two instalments will cover the (a) debt restructuring fee and (b) legal fees for obtaining a court order.

The instalments will be distributed by a NCR accredited PDA (Payment distribution Agency) on a monthly basis. 5% of the instalment (to a maximum of R400) is deducted each month for your debt counsellor to manage your file and after 24 months it decreases to 3%.

How will Debt Review influence my credit record and will I be able to apply for credit again in the future?

Whilst you are under Debt Review, a flag indicating that you are under Debt Review will be present behind your name at the Credit Bureaux. Once you have satisfied your debt obligations, we will instruct the Credit Bureaux to remove the flag and there will be no indication that you have ever been under Debt Review.

If you however do not apply for Debt Review, the situation is much worse. If you skip monthly instalments on any of your Credit Agreements, whether it is a Mortgage Bond or a mere clothing account, this will be listed as non-payments.

For purposes of obtaining credit in the future when you are back on your feet again, it would therefore be an obvious choice to rather opt for Debt Review than to try and juggle your Credit Providers by paying them less than your original instalment or not paying all of them timeously.

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