1) Is Debt Counselling the right solution for me?
2) What is the difference between debt counselling and sequestration?
3) Who works with my case?
4) Will I be blacklisted now?
5) Your fees and costs? And how do I pay them?
6) What is the difference between the debt counselling process and the court process?
7) What is the effect of a court order?
8) Are all my debts included in the debt counselling process?
9) What should I do after I applied?
Is Debt Counselling the right solution for me?
If you earn an income, but it is just not enough to pay your monthly debt and have enough left to get by on, then debt counselling is for you. Debt counselling was designed for people in your situation, so that you don’t have to lose everything as was often the case in the past. It is definitely worth it to speak to one of our consultants about the NCR Debt Counselling process.
What is the difference between debt counselling and sequestration?
With debt counselling, the idea is to repay all your debt, but over a longer period and with much lower payments than you were used to. When you contact our Debt Counselling Pretoria office and apply for debt review, this is exactly what we will aim to do. In the process you get keep your assets.
Sequestration, on the other hand, is a legal process which falls entirely outside the scope of Debt Counselling South Africa whereby all your assets are sold, and the proceeds paid to your creditors. After this process is complete, your remaining debt is written off and you start with a clean slate. No debt counselling is performed at any stage in this process.
While over 90% of our clients find sufficient help in the NCR debt counselling process, there are some for whom sequestration is the better, or only, alternative. Our Debt Counselling Pretoria office has a legal team to advise and assist in both instances. Sequestration is usually applicable in cases where the applicant has no income, or has an insignificant income compared to their debt, but has fixed property. This recommendation will be made by an experienced attorney after consultation with you, if we believe it to be the best solution for you.
Who works with my case?
Our debt counsellors are experienced attorneys who take the interests of our clients to heart. All important recommendations and decisions are made or approved by the debt counsellor, and you are always welcome to discuss questions relating to your case with the attorney who is your debt counsellor.
Our administrative staff are experienced and compassionate. Some of them are on the program themselves, and they understand the hardship you are going through. When we receive your application, you will be notified of whom your assistant is, and who your debt counsellor will be.
Will I be blacklisted now?
When we accept your application, we will notify your credit providers as well as all the credit bureaus that you are under debt counselling. It will be noted that you are on debt counselling. This is required by law, and is for your own protection. If you were to enter into any further debt agreement, the debt review process will be compromised. The note on your credit record will ensure that creditors do not extend further credit to you, thus plunging you into deeper trouble. The NCR Debt Counselling process prevents creditors from extending further credit and it will immediately be considered as reckless credit. To apply for another loan is also a contravention of the Credit Act, and will harm our chances to help you. If you are at all unsure whether something constitutes a credit agreement or not, please contact our Debt Counselling Pretoria office immediately.
On the other hand, as soon as we are satisfied that you no longer need to be on the program, your debt counsellor will notify the credit bureaus again, and they will remove your name from the list. The Debt Counselling South Africa process does not allow for a trace to remain against your name for having been under debt counselling. This decision is made by the debt counsellor and you won’t need to go to court again to have your name cleared. Debt counselling is thus a safe way to ensure that debt rehabilitation does not lead to a long-term negative reflection on your credit record.
Your fees and costs? And how do I pay them?
Our fees are R3500 per single application, and R4500 for a joint application. The debt review process starts as soon as payment arrangements are made. This payment covers the whole of the 60 day debt counselling process. These fees are standard and specified as part of the NCR Debt Counselling process. After the 60 days, we will have to go to court to get a court order, and this is a separate legal process. We benefit from the fact that our Debt Counselling Pretoria office employs two full-time attorneys to assist with this process. The cost varies from court to court, and also depends on the number of creditors you have. For Debt Counselling South Africa we find that basically all cases require a court order to ensure that creditors do not pull out of the agreement and try to take legal action against you later. Generally, the fees should be around the same as your debt counselling fee. Debt Counselling even provides you with a solution for this.
When you are placed on debt counselling, you do not have to pay any debt for at least two months. This is the period for debt review. We use your disposable income (the amount we calculated that you would have available to pay debt with) for those two months to cover our costs and put aside money for the court process. This is perfectly acceptable under the NCR Debt Counselling process. Of course full or partial payment will depend on the amount you have available. Our debt counselling Pretoria office will help you through this process. With the recommendation letter you will receive after your application, you will receive more information on this, as well as a quote for your legal process. The debt counselling South Africa process allows for the legal process and it is definately to your benefit.
You should receive a recommendation letter from us shortly after you applied. This will confirm that you have been placed under debt counselling and will also inform you of what to do over the next three months. Please read through it carefully, as it will contain very important information.
What is the difference between the debt counselling process and the court process?
1. The debt counselling process:
During the debt counselling process, we collect all the information from you and your creditors. This is done by way of a process prescribed by the National Credit Act, and involves certain forms that must be sent out within certain time frames. Once we have informed everyone that you are on debt counselling, and received all the information relating to your accounts from your creditors, we then prepare a proposal to your creditors.
This proposal will contain our recommendation on how much you will pay in future. Creditors will consider this proposal and either accept or reject it, or may not even give an answer. After 60 days, the process is completed and those creditors who did not accept the proposal, or who didn’t provide us with an answer, will be free to proceed with legal action again. While we try our best to convince everybody to accept, in most cases there will be one or more who has not, by the end of the 60 days, accepted the offer.
2. The court process:
The crucial thing here is that, as long as we apply for a court date in time (within the 60 day protection period) and as long as you keep up your (new) payments every month as we suggested in our payment proposal, creditors can’t withdraw from the process until the court has had the chance to make a decision on the matter.
As soon as we are finished with your payment proposal and considered the replies, we draw up court documents. The case is then opened in court, and a date given for the hearing. These court documents, together with your debt counselling documents, is then sent to all your creditors or their attorneys. An attorney will appear in court to handle the application, just like with any other court matter. And, like with all court matters, cases are often postponed. While this process goes on, we keep negotiating for you to try and get creditors to consent to our proposal.
The magistrate will consider the matter and will decide if our proposal is fair or not. As soon as the court grants the order, that order is again sent to all your creditors. The effect of this is that, as long as you keep up your end of it, no creditor may withdraw from the process after the court has granted the order, because the court order is binding on all of them, whether they have accepted the offer or not.
What is the effect of a court order?
The effect of a court order is that all creditors are bound by the decision of the court, and may not take any further legal action against you for as long as you obey the court order. This means that the proposal we made to creditors will stay in place until you have settled all your debt or until you are in a position to offer more.
Are all my debts included in the debt counselling process?
No. Only debt arising from credit agreements fall under the act. However, we try to negotiate with other creditors too, as we need to budget for you to pay a fair amount to them as well.
Also excluded are credit providers who have already issued a summons against you by the time you apply for debt counselling. Again, we accommodate them by budgeting for the amount you’ll need to pay towards that debt.
Organs of state, schools, your body corporate, doctors and vets are examples of agreements that normally do not fall under debt counselling. In any event, we urge you to include ALL your debt on the application from. Even if an agreement falls outside the process, we still need to budget for it.
What should I do after I applied?
If we have not been in contact with you within 24 hours of receipt of your form, please give us a call to make sure we have received it.
The first thing you will need to do, is open a new bank account so that your debit orders won’t go off when your money is paid in. This also means that you will have to arrange with your employer to pay your salary into that new bank account. We recommend that you open an account at a bank where you do not owe any money. The only debit orders that should go off are ones for necessary expenses, like insurance and medical.