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. Should a consumer’s situation change for the better and they are in a position to repay all monthly obligations as they were before the restructuring they will be allowed to be release from debt counselling. Although nothing is binding, any consumer can leave the process at any time for any reason
Can I cancel the application
Debt counselling or Debt review is a process of restructuring and rearranging your debt according to the provisions set forth in the National Credit Act. Debt counselling is the perfect legal tool for over indebted consumers that cannot, but want to, pay their debt.
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What is debt review and debt counselling?
Debt counselling and debt review is the perfect solution for consumers that wants to pay all their debt but simply cannot afford it. By lowering your monthly debt, you can make the repayments more affordable and ensure that you meet all your creditors needs.
Once you have managed most of your smaller debt and you are in a position to pay all your other debt, you can be released from debt counselling and debt review as your financial situation changed for the better. Debt counselling is not a permanent personal disability, but rather a very affordable and useful tool to help you manage your debt.
Pay less towards debt every month
A Very important consideration when applying for debt counselling will be who handles your money! Debt counsellors are not allowed to handle any money from consumers
When do I start paying?,
As soon as all debt has been cleared the debt counsellor will release the consumer from debt review and issue him/her with a clearance certificate. All records will also be removed from the credit bureaus
How long?
1. When a consumer (client) realizes that he/she is over indebted and that some arrangements have to be made to make sure all monthly repayments are met.
2. The consumer contacts a registered Debt Counsellor who supplies a regulated form 16 and assists with the completion thereof. As soon as this form is completed the consumer will have formally applied for debt review in terms of the Act.
3. All requested documentation as on the application form is supplied by the consumer within 5 days of signing the form 16.
4. With the information and supporting documents supplied by the consumer the debt counsellor now informs all the known creditors of the consumer that the said consumer has applied for debt review. This is done with the regulated form 17.1 as well as 17.2
5. A formal analysis is done by the Debt counsellor to determine if the consumer is indeed over indebted. This is a very simple calculation once all information has been taken into account. A consumer can only apply for debt counselling if his/her monthly disbursable amount (Nett income minus living expenses) is LESS than the amount required to service all obligations. AS EXAMPLE ONLY. If the consumer only has R5000 to pay his/her debt after the living expenses have been accounted for, and the total monthly debt repayments are R6000 the application would be a success.
6. If the consumer is indeed over indebted according to the above method all creditors would be informed of this for their record.
7. The restructuring process can now begin. The Debt counsellor will now restructure and renegotiate all credit agreements and present these proposed terms to all creditors. This new proposal will then restructure the consumer’s monthly commitments to be more affordable and ensure that all credit agreements get something every month.
8. The new proposal will now be sent out to all the creditors after it has been approved by the consumer. Should all creditors agree to a consent order that new arrangement will be made an order of court. If there are some creditors who don’t agree to the restructuring a court date will be allocated for the matter to be heard. At this hearing the magistrate will have no choice to grant the order if the debt counsellor acted in terms of the Act and subsequently restructured the debt accordingly.
10. All disbursements of contributions will be handled by a registered Payment Distribution Agency (PDA). The PDA is regulated and governed by the Act. As soon as a restructuring proposal is agreed on by the consumer payments of the distribution amount will be paid over from the consumer directly to the PDA. The PDA in turn will disburse with the funds as per the restructuring proposals.
Debt counsellors are entitled to a maximum of R6000 plus VAT for single applications and R4000 plus VAT for a joint application.
The Act allows for the following payment of Debt counsellor fees as well as Legal fees.
The first payment made by the PDA will pay the debt counsellors fee
The second payment will pay the legal fees
The third payment will be the first payment that creditors receive. This is done so that consumers don’t have to pay any money that they might not have up front, and to make the process affordable.
12. When the payments are being made to the creditors by the PDA there will be some agreements that will be paid up before others. As soon as this happens the Debt counsellor must restructure the payments again to make sure any creditor is not paid more than he must receive and to disburse the surplus equally between the other to ensure that the process runs smoothly. For this the Debt counsellor is entitled to a 5% after care fee not exceeding R400.
Application for debt review is very quick and affordable. If we have all your documentation and the application form you will be registered that same day and all you assets will be protected from legal action and repossession from creditors
Very fast and affordable
We have been preventing repossession of vehicles and property for more than 10 years and will not allow any slip ups when it comes to your assets Debt counselling and debt review will prevent repossession of vehicles and property.
We are discreet and professional. This will ensure that your application for debt review and debt counselling will be treated without prejudice
Please send DC and your email address to 33903 and we will contact you today!
Prevent repossession
SOME DEBT COUNSELLING FACTS
