Debt Counselling Questions

What exactly is debt counselling?

Due to the current economic crisis, the National Credit Act instituted debt counselling as a means of providing relief to struggling debt-ridden consumers. The aim of debt counselling is to help consumers create a repayment plan more affordable in terms of their financial situation and accepted by their credit providers as a valid payment option. There are no restrictions on who can use debt counselling. Anyone from any income group who owes any amount of debt can apply for debt counselling.

How would I know that I need debt counselling?

Simple. Answer the following question. Does your monthly expenses exceed your monthly income? If you answered yes, then you are probably over-indebted and may qualify for debt counselling. The golden rule, however, is not to wait too long before you apply for debt counselling, or your financial situation may only deteriorate.

I'm not so sure I should apply for debt counselling. Is it really going to help me?

Should you choose not to apply for debt review, your situation may become even worse. Any monthly instalments you skip will show up as a non-payment, whether for credit agreements, home bonds, clothing accounts or others. If you ever intend on getting credit in the future once you're back on your feet, a debt review is the best choice for you. Also, remember that one single monthly instalment is far easier than juggling all your instalments individually.

Why does so much negativity still surround debt counselling?

Debt counselling was first introduced back in June 2007 as a result of the implementation of the National Credit Act (NCA). In its early days, debt counselling received a bad reputation, which was largely due to the fact that it was a new form of legislation with systems that were still in its infancy. Today it is a different matter, however, as more and more people around South Africa have come to realise that the system is working. Since 2007 initial stumbling blocks have been overcome, and South African debt counselling is regarded as one of the most successful systems worldwide.

How does Debt Relief Today manage to lower my payments?

As a registered debt counsellor, the NCA permits us to lower your monthly payments by negotiating with credit providers to extend your repayment periods. This can also be done, in some cases, by lowering your current interest rate. Our reputation with most credit providers around South Africa allow us to restructure a new monthly payment structure that's more realistic for your unique set of financial circumstance.

Will anyone know that I am under debt review?

No. Absolutely not. Your confidentiality is 100% guaranteed.

Do I have to meet with any consultants?

No.No matter where your location in South Africa, your application can be finalised by telephone or email. If you want to arrange a meeting in person, we will still be able to assist you.

Will debt review have a negative impact on any job applications?

Debt review will in no way affect any of your future job applications. Should an employer conduct a credit check on your name and note that you are under review, they should respect your decision. It is not only the responsible thing to do when experiencing financial difficulty, but a real solution too. In fact, defaults on your credit record will most likely raise an eyebrow from prospective employers.

What will debt review cost me?

Fees will vary depending on your financial circumstances, but the idea is to get out of debt, not accumulate more. The fee will be regulated by the National Credit Regulator (NCR) and, therefore, you cannot be overcharged by any registered debt counsellor.

How are payments made every month?

One single monthly payment will be made to a Payment Distribution Agency (PDA). This agency will ensure that money is distributed to all credit providers in terms of your newly structured repayment plan.

How long will it take before I actually experience relief?

Debt review brings immediate relief. No legal action can be taken against anyone who is under review for the first 60 working days, so you will be protected while Debt Relief Today starts to work on your provisional payment plan. Your new repayment plan should, under normal circumstances, take no longer than 2-5 days to calculate, after which all credit providers will be informed.

If I am placed under debt review, will my credit providers still be able to contact me?

No. Your credit providers will in terms of section 86 of the National Credit Act no longer be able to contact you directly once you are placed under debt review. They will now instead have to deal with your debt counsellor. In most cases, all credit providers have been notified within 48 hours, but it can take up to 5 days before they receive notification. Should any credit provider persist in contacting you after they have been notified, simply refer them to your debt counsellor to deal with the matter.

What happens if my credit providers do not accept my debt review?

Should your credit provider refuse the reasonable terms set forth by Debt Relief Today, our specialist attorneys will pursue your debt review in court, even if your credit providers disagree. Most credit providers just want their money, and they are unlikely to decline a reasonable payment plan.

Do I have to go to court?

No. Our specialist attorneys will be the applicant in the matter and you will merely be a respondent. In unusual circumstances, the magistrate may request your presence in court to establish certain facts, but it's highly unlikely. Most credit providers do accept a payment plan as they are simply happy to get paid.

I’ve already been summoned to court! Can Debt Relief Today still help me?

Maybe. In a situation like this it's best to contact us personally. There may be ways of further assisting you. Our qualified staff will be able to advise you on the best financial decision to make. Remember, the sooner you contact us, the better your chances are of finding a solution to your debt problem.

What if I already have judgements against me?

You should still contact Debt Relief Today in this situation. There may always be another way to assist you, depending on your unique set of financial circumstances. You have a much better chance of figuring out a solution by discussing the financial problem with a qualified debt counsellor.

Can I be “blacklisted” whilst I am under debt review?

No. Absolutely no legal action can be taken against anyone under debt review. Should the blacklisting be in effect before you come under review, your credit record will still reflect it unfortunately. Once again, the golden rule is not to wait too long before you apply for debt counselling.

How long will I remain under debt review?

Everyone's financial circumstances are unique. In order to lower monthly instalments, repayment periods will be extended. Different credit providers will also agree to different terms, and even lower their interest rate in an effort to settle the debt in the shortest time possible. Your restructured debt repayment plan will indicate exactly when your last day of payment will be.

What is the maximum number of years that a person could be under debt review?

There is no maximum or minimum time period. The time period will be determined by the amount of debt versus the amount paid every month. Naturally, it is in everyone's interest to settle the debt in the least amount of time realistically possible.

What if debt counselling won't work for my financial circumstances?

In some cases, debt counselling may not be the best option for your particular set of financial circumstances. Debt Relief Today will still be able to refer you to preferred service providers who will be able to assist you through the process. This may involve selling your property, or even sequestration whereby you are declared insolvent via a court order.

Will I lose my house and my car because I am under debt review?

Being under debt review CANNOT cause you to lose your car or home. In fact, it can actually save your home, vehicle and many other assets. You will always be in a better position to keep your assets when you are under debt review instead of trying to fight off the banks yourself. But, this all depends on the circumstances of your unique situation. Here are some of the factors which may determine your outcome:

  • Are you fully cooperating with the debt counsellor? The willingness to cooperate is the fastest way to get back on financial track.
  • Have you recently received a Section 129 letter from a credit provider? Remember, you only have 10 working days after receiving it in which you can apply for debt counselling and save assets.
  • Have you been served with a summons in respect of your mortgage bond or vehicle finance? Contact us immediately!
  • How many vehicles do you have? What are they used for? Luxury items including golf carts, boats, quad bikes and jet ski’s might have to be returned to the bank.

Can I still use my credit card or apply for credit whilst under debt review?

Unfortunately not. Once you are under debt review, the plan is to become debt free, so no further debt may be acquired. Whilst you are under debt review, a red flag status will be present behind your name at all credit bureaus.

What are credit bureaus?

Credit bureaus collect and store data supplied by credit providers, and then proceed to provide consumers with a credit score. When consumers request credit, like opening up a clothing account, bond, personal loan, etc., the credit provider will run a check with a credit bureau on the consumer's particular credit score. This will ensure that the amount of credit on request is affordable for the consumer.

How do I clear my credit score record hereafter?

Once you have satisfied your debt obligations in terms of your payment structure negotiated by Debt Relief Today, you will be issued with a clearance certificate. We will inform the National Credit Regulator (NCR), and all credit bureaus will be instructed to remove your red flag status. There will be no more indication whatsoever that you have ever been under debt review, and you will be allowed to apply for credit once more.

What happens if I lose my job whilst under debt review?

This is the reality of the South African job market, and a major problem for all parties concerned. Should you be retrenched, Debt Relief Today may still be able to assist and guide you towards an alternative solution, but you must contact us immediately as you will still be obligated to continue making payments to the PDA.

What if something happens to me and I cannot continue paying my debt review instalment?

You must, at the very least, be able to prove your circumstances and the legitimate reasons why you are unable to pay. This includes things like accidents and time spent in hospital. Thereafter, it will depend on how reasonable your credit providers are. Remember: There are no payment breaks or holidays when you are under debt review, so never try to abuse or evade your payment agreements.

What happens if I miss my monthly repayments?

If clients miss a monthly repayment, credit providers will most likely proceed to terminate your debt review status and start legal proceedings, which will include judgements and garnishee orders.

Will my insurance policies be affected by debt review?

No. Arrangements are made for all your insurance policies in your payment plan. Even if you have a vehicle financed you will still be obligated to continue insurance payments.

Can I still apply for debt review if I am unemployed?

No. Only when you have an income that puts you in a position to make reasonable monthly payments will you be able to apply for debt counselling. Should you be unemployed without pension or other income, debt review may not be the solution for you. Debt Relief Today may, however, still be able to provide you with valuable assistance and guidance in this situation, so do not hesitate to contact us immediately.

Can I still rent property if I am under debt review?

Yes. Debt review is not a credit agreement, so you will still be able to rent a property.

Can Debt Relief Today provide consolidation loans?

No. Unfortunately we do not. Our goal is to help you become debt free. Increasing your debt will not help to solve any of your financial woes.