Registered Debt Counsellor: NCRDC 2578, NCRDC 3667, NCRDC 4129
Registered Debt Counsellor: NCRDC 2578, NCRDC 3667, NCRDC 4129
Services
Debt Counselling Process Explained
If you are over-indebted, a debt counsellor can negotiate with your credit providers on your behalf to get lower interest rates and reduced monthly instalments.
1. Filling The Form
When you apply for debt counselling, you will have to fill out an application form, called Form 16, which you submit, together with all your credit agreements, to a debt counsellor.
2. Assessment
The first thing the debt counsellor does is assess whether you are over-indebted, or debt stressed, and whether or not your creditors were reckless in granting you credit.
3. Processing
The debt counsellors have 30 business days, from the date of your application, in which to make this determination.
4. Certificate of Balance
Within five business days of accepting your application for debt counselling, your debt counsellor must inform all your creditors and the credit bureaus of your application. The debt counsellor does this by sending your creditors a prescribed form (Form 17.1) and calling on them to issue a certificate of balance (which is a “certified notice of the balance of a customer’s account, and accrued interest and charges, at the close of business on a specific date”).
5. Interim Repayment Plan
So that you continue to pay your creditors throughout the process, your debt counsellor will draw up an interim repayment plan, which he or she must submit to a registered payment distribution agency (PDA).
6. Application Review
During the first 60 business days from the date of your application to be placed in debt counselling, legal action may not be taken against you in respect of debts that are “under review”. This means that if the credit provider has not already proceeded with legal action against you, you have two months in which to negotiate a payment arrangement. But if your creditors have already begun taking action against you in respect of certain of your debts, you don’t enjoy this protection, and these debts can be excluded from debt counselling.
7. Repayments
Within five business days of receiving a Form 17.1, your creditors are required to provide your debt counsellor with certificates of your account balances. This information helps the debt counsellor to determine whether or not you are over-indebted and to conduct an affordability assessment. The affordability assessment is aimed at working out how much you can realistically afford to spend on debt repayments.
8. The Procedure
Once your debt counsellor has determined whether you are over-indebted or debt stressed, he or she is obliged to follow a certain procedure as prescribed in the National Credit Act. The procedure will depend on the debt counsellor’s determination.
9. If Over-Indebted
If your debt counsellor determines that you are over-indebted and legally eligible for debt counselling, he or she must notify all your creditors and the credit bureaus of this by sending them a prescribed form, Form 17.2, marking the appropriate paragraph that confirms you are over-indebted.
10. If Not Over-Indebted
If your debt counsellor determines that you are not over-indebted or eligible for debt counselling, he or she must reject your application and send a Form 17.2 to all your creditors and the credit bureaus, marking the paragraph that confirms that you are not over-indebted.
11. Affordable Repayment
If your debt counsellor determines that you are over-indebted, he or she will draw up a repayment plan to rearrange your debt obligations in line with what you can realistically afford. Your debt counsellor must submit the plan to your creditors for their consent within 60 business days of receiving your application for a debt review.
12. Consent Order
If all your creditors accept your debt counsellor’s repayment proposal, your debt counsellor must obtain a consent order from the National Consumer Tribunal or a magistrate’s court, again within 60 days.
13. Consent Rejection
If you or any of your creditors rejects the repayment proposal, your debt counsellor must refer the matter to a magistrate’s court with a recommendation, which he or she will seek to have made an order of court. A magistrate can reject the debt counsellor’s recommendation if he or she considers the proposal unreasonable. Unless the magistrate gives the counsellor another chance to improve on the proposal, this has the effect of a termination of the debt review process.
14. Consent Acceptance
If your creditors accept the repayment plan, or if a magistrate’s court agrees to the repayment plan, a PDA will channel your revised payments to your creditors. You make these payments directly to the PDA. The PDA is responsible for providing monthly statements to you and payment schedules to your debt counsellor and creditors, as well as attending to queries from the respective parties. (You can be charged three percent of distributable income by a PDA, but this is capped at R450 a month.)
15. Clearance Certificate
Once all of your debts have been paid, your debt counsellor will issue you with a clearance certificate and will notify the credit bureaus that you are no longer in debt counselling. The fact that you were in debt counselling will be expunged from your credit record, but if you had judgments against you, these would remain on your record for the remainder of the five-year data retention period.
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Administration Explained
An Administration Order is a Court Order granted in a Magistrates Court in terms of which:
A debtor whose total debt does NOT exceed R50 000-00.
A debtor is legally protected from their creditors.
A debtor is able to pay a monthly/weekly contribution to such creditors based on what is AFFORDABLE
The effectiveness of the Administration Order is twofold:
The Debtor’s Salary is protected against garnishee orders by Creditors whilst the Debtor’s Assets are protected against repossession.
The Debtor only pays the amount that is stipulated on the Court Order which amount is calculated on the Debtor’s Affordability and NOT on what would be to the benefit of the Creditors.
Benefits
You receive the protection of a court order for your salary and you’re assets.
All loans, credit cards, retail accounts, judgment/garnishee orders are included.
Distributions to your creditors are made quarterly.
No more harassment from creditors.
All garnishees are suspended.
You pay one monthly/weekly instalment that you can afford to cover all your debt.
You have control of your salary and your life again.
Should you find yourself in a better financial position at any time you may approach your administrator to have the order rescinded (removed).
You will be eligible for finance (normally after 21 days).
Requirements
You must be employed or receiving an income even if you are a Pensioner.
Original / copy of identity document.
Original/copy of salary advice/payslip (not more than 2 months old).
If self employed – 3 months bank statements.
If married in community of property, the above documents are required from your spouse as well as your marriage certificate – therefore taking both salaries into consideration however only one person’s estate will be placed under administration. (single application).
Your total debt may not exceed R50 000 (fifty thousand rand) at the time of making your application.
NB! You may not obtain further credit until your current debt has been paid in full or your administration order rescinded by court.
NB! Housing bonds and vehicle finance agreements are not included.
NB! You remain liable for the creditors contractual interest.
Rescission
What is Rescission?
When a contract is rendered null and void, and so is no longer recognized as legally binding.
The courts can free non-liable parties from their agreed obligations
When possible, will effectively seek to restore them to the position they were in before the contract was signed.
What do we rescind and what can be rescinded
Administration Orders
Debt Review Applications
Judgments
Requirements
Original / copy of identity document
Original or copy of salary advice/payslip (not more than 2 months old)
Bank statement (3 months) – if self employed
List of monthly expenses
Paid up letters
A paid-up letter/s from the creditor/credit provider is required in most instances to insure a successful application for rescission of judgment.
ITC Clearance
ITC Clearance explained:
A Default Listing – regardless whether the debt is paid up or not – will be retained on your record for 2 years.
There is one way and one way only to remove this type of listing from your credit records. And that is by answering the following questions:
Did you ever receive any notification in writing from the creditor informing you of their intention to list your default payment on the credit bureau?
Did you ever receive a 20 days notification in writing of the impending listing of your account on the credit bureau?
If your answer to any of the questions above is NO:
Then you know that your consumer rights have been violated and the law has been broken
Consumers rights and process:
Consumers have the right to challenge this listing and dispute it with the credit bureau that displays it on your record.
Once you have followed the proper channels to dispute the listing, it then becomes the duty of the credit bureau to investigate your claim against the credit provider.
The NCR gives the Credit Bureau 20 days to complete the investigation and reach a resolution.
Once the resolution is reached, the Default Listing will be removed from your credit records.
Once account/s are paid up and consumers are in receipt of paid-up letter , and the consumers is still being flagged as “in arrears”, consumers have the right to challenge this listing and dispute it with the credit bureau that displays it on your record.
Once you have followed the proper channels to dispute the listing, Credit Providers / Credit Bureaus will accordingly update their system, and your status will simultaneously be updated.
Benefits
Default / arrears listing removed
Credit status updated
You will be eligible for finance (normally after 21 days)
Requirements
ID
Power of Attorney
Paid up letters
List of monthly expenses
Paid up letters
A paid-up letter/s from the creditor/credit provider is required in most instances to insure a successful application for rescission of judgment.