benefit of receiving debt counselling is that nobody could repossess your car,
house or assets whilst you are involved in the process? What many have
misperceived is that counselling removes your obligations toward you debt. It
is simply a debt restructuring process that allows you to keep your hard earned
assets while settling your creditors over a new negotiated period that you can
South Africans, like so many of our counterparts in other developed countries
got carried away with excessive credit and this reckless spending has come back
to haunt us. For some, so badly that we cannot afford our monthly payments
anymore. More than 150 000 South Africans are expected to be under debt
counselling by the end of 2009.
step in addressing the situation is forget about the shame issues, to
acknowledge the problem and to be pro-active in solving it. The Debt Review
process is part of that solution of helping people take control of their
counsellors are registered under section 44 of the National Credit Act 34 of
2005 and are individuals who have undergone specific training in order to
qualify and be registered. When applying for Debt Counselling always make sure
your counsellor is properly registered.
function is ;
a consumer's state of indebtedness
facilitate debt re-arrangement with credit providers
recommendations to credit providers and Magistrate’s Courts on behalf of
who, after deducting living expenses from their net salary, has less cash left
over than the instalments on their total debt, may apply for counselling. Very
importantly, is that the applicant must carefully consider their living
expenses and cut back on all unnecessary luxuries.
fee of R50 only for assessment and if the Counsellor agrees that you are indeed
over indebted, they will then undertake your case. Fees of up to R4000 are then
payable – but NOT upfront. Their fees will be deducted from your first
instalments. DO NOT make any upfront payments and report anyone who asks for
the first steps?
have an interview with the Debt Counsellor and he or she will explain the whole
process to you, as well as provide you with a written document laying out the
regulations, steps etc.
also be advised as to what documents you need to provide them, as well as
preparing a full budget of your monthly expenses, copies of statements of all
outstanding accounts and so on.
will then bring with you to your next meeting
Counsellor will asses your situation and concur that indeed you are over
indebted or if the debt counsellor finds that the borrower is not
over-indebted, a letter of rejection will be given to the borrower, and the
credit providers will be allowed to continue with the legal proceedings.
person applied for debt counselling, the counsellor had to notify all the
credit providers and the credit bureau within five days. The consumer would
then not have access to any more credit.
Having found the debtor to indeed be in-indebted, then:
counsellor can make a proposal to all credit providers on how the debt can be
where the credit providers are not prepared to agree to the debt counsellor's
proposal on how the debt should be restructured, the debt will be restructured
via the court.
credit agreement is declared reckless, i.e the creditor have credit recklessly,
certain obligations by the borrower may be terminated or suspended by the
would then be rearranged by either lowering interest rates, extending repayment
periods or the lender forfeiting the interest and accepting only the capital
amount agreed to a repayment to your creditor is paid over to the Debt
Counsellor on a monthly basis who will make the necessary distribution.
are undergoing debt counselling, your creditors cannot take legal action
against you or repossess the goods you bought on credit.
that you are under debt review is noted on your credit record and during this
period, you are not allowed to make any more debt.
that debt counselling does not only protect a consumer’s assets but also
his/her credit record! A consumer would qualify for credit as soon as their
debt was settled and they had obtained a clearance certificate from the debt
During our economic circumstances of the last 12 months, we have picked up a lot
of experience in assisting homeowners who felt they have had no option but to
sell. Please feel free to contact us if no need any assistance or referral to a
CDPE Qualification - What does it mean? For more detailed information on Finance issues go here Go back to Buyers main page