WHAT IS DEBT REVIEWDebt Review is a solution provided by the National Credit Act to assist over-indebted consumers. Debt Review takes into consideration all of the consumer's accounts and establishes a holistic strategy to get the consumer out of debt. Debt Review provides protection to the consumer from credit providers who harass them or threaten to repossess their assets. Section 86 of the national credit act 34 of 2005 regulates the debt review industry. Consumer rights are specifically protected by the Act and entitles the consumer to a fair and reasonable debt re-arrangement plan.

Frequently Asked Questions

Why Debt Counselling? When can I apply for debt review? Can I apply for a debt review if I am unempl

oyed? What if I already have judgments against m

e? I’ve been summoned to court, does debt co

unselling cover this? Can I apply for more credit or use my credit

cards while I am under debt review? Is my money safe? Can the credit providers change their mind

after the debt plan has been agreed? Will my employer and work colleagues find

out? Once I’ve cleared all my debt will you remo

ve my name from the credit bureau?

Why Debt Counselling?

The debt counselling process is a powerful process introduced by the National Credit Act to help over–indebted consumers. The main purpose of the Act is to help you, the consumer. This process also provides immediate protection against legal action and blacklisting.

D C Associates debt counsellors are fully trained and registered with the NCR ensuring you are protected.

When can I apply for debt review?

Any consumer who is over-indebted can apply for debt review. According to the National Credit Act, a consumer is over-indebted when he/she is unable to satisfy in a timely manner all his obligations under all his/her credit agreements (after paying his basic living costs).

In short, when you struggle to meet all your debt repayments on time; or if you do not have enough money left after paying all your essential living

costs to pay your debt, you are over-indebted. You can apply whether you are: blacklisted or not; or whether you are in arrears or not. Typical signs of over-indebtedness include: You receive threats because of arrears on credit agreement payments for

example: Letters and notices Phone calls from creditors When you borrow on a regular basis from micro-lenders/cash-loans When you have garnishee orders against your salary When you are using a credit card to buy groceries or to pay other basic living costs,

debt and credit agreement payments.

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

One of the most important requirements for debt review is being able to prove that you can pay your creditors a reasonable amount. You will unfortunately not be able to go under debt review if you do not have an income. If your partner is employed, you could apply jointly under one application.

What if I already have judgments against me?

You can still contact us. However, please ensure that you provide us with all of the details of your situation.

If a summons or legal notice in terms of section 12a of the NCA was issued before date of application, it cannot be included except if prior written permission was granted by the credit provider. Negotiations in this regard will be done by D C Associates on your behalf.

The legal process starts when a notice in terms of section 12a of the NCA has been sent to you via registered mail.

I’ve been summoned to court, does debt counselling cover this?

No, but most attorneys and creditors will respond to the debt review program favourably and agree to have this included in the debt review. You can therefore still contact us. We will negotiate with the creditor on your behalf and find the best possible solution for you.

Home loans and vehicle finance are however a bit trickier. Please contact us if your query is related to this.

Can I apply for more credit or use my credit cards while I am under debt review?

No, unfortunately the act prohibits you from incurring any further credit while under debt review. You will have to destroy all your cards and you will not be allowed to use your credit card.

… Section 88(1): “A consumer who has filed an application in terms of Section 86(1) for debt review must not incur any further charges under a credit facility or enter into any further credit agreement”.

Is my money safe?

Absolutely. At no stage during this process do we (or anybody else) have access to your money. Your money is paid directly to the NCR accredited Public Distribution Agent (PDA), who in turn distributes the funds to your creditors.

Our fees are only paid out as disclosed in our documentation.

Will my employer and work colleagues find out?

No. All your information is treated with the utmost confidentiality. We will not contact your office unless instructed to do so.

Once I’ve cleared all my debt will you remove my name from the credit bureau

Yes. The Credit Acts states that once a clearance certificate is issued all records that you were subject to the debt review order must be removed within 5 business days.

What does it cost me? An application fee. A fee of R50 is payable by anyone who applies

to a debt counsellor for a debt review – this is an assessment of your finances to determine whether or not you are over-indebted and eligible for debt counselling.

* A rejection fee. If a debt counsellor determines that you are not over-indebted (in other words, not eligible for debt counselling), you are liable for a rejection fee of R300 (excluding VAT).

The application and rejection fees are the only fees that you must pay directly to a debt counsellor. All the other fees are worked into your restructured repayment, which is a single amount paid monthly to a payment distribution agency (PDA). A PDA is an entity accredited by the NCR to collect repayments from over-indebted consumers and to distribute them to credit providers (see point 5, below).

* The debt counsellor’s fee – also known as a restructuring fee – is a maximum of R6 000 (excluding VAT), or the first instalment of your restructured repayment, whichever is the lesser. This means that if your instalment is less than R6 000, your debt counsellor may charge you no more than the instalment.

Cost of debt review continued

* After-care fees. In addition to the debt counsellor’s fee, you will be required to pay a monthly after-care fee, which is paid to your debt counsellor. This is five percent of your monthly instalment to a maximum of R400 a month (excluding VAT) for 24 months. Thereafter, it decreases to three percent of the monthly instalment to a maximum of R400 a month, until you’ve paid off all your debt.

Slot says the fees listed above are the maximum fees and in practice the debt counsellor’s fees paid by consumers are usually much lower. “The average fee ranges between R1 500 and R2 800,” he says.

It is also important to know that, if you withdraw from debt counselling after the debt counsellor has finalised the negotiations with your creditors to restructure your debt repayments, you will be liable for a fee equal to 75 percent of the restructuring fee.

And if your debt counsellor fails to submit proposals to your creditors or refer your matter to the National Consumer Tribunal or a magistrate’s court within 60 days from the date of your application, you are entitled to a full refund from the debt counsellor

ADDITIONAL SERVICES An Insurance company provides

consumers with competitive rates for insurance for people that are under debt review

Credit reports – each consumer is entitled to one free credit report per anum.

Recession of judgements

Voluntary Surrender of Estate

Debt review is not the solution for all consumers

We are able to assist with the Voluntary Surrender of Estate as an alternative to consumers

Detail and contact details of Attorneys will be provided on request

Our MissionTo help people aspire to a new start in lifeTo aspire to a debt free lifeTo educate our clients on financial wisdomTo teach our clients how to budgetTo assist our clients at all timesTo ensure the best payment plan and

interestrates for our clients

Prescribed Debt The extinction of debt by prescription is provided for by the

Prescription Act 68 of 1969. This means that if a credit provider has not taken legal action, issued a summons, taken a judgement within 3 years of default of payments, the debt is extinguished. In simple terms:-

If you have not acknowledged the debt in any way in the past three consecutive years, either in writing or verbally,

If you have not made a promise to pay or made a payment to the outstanding debt for three consecutive years,

If you have not been summonsed or no judgement has been taken against you by a creditor for the debt within the past three consecutive years, the debt would have expired.

This applies to debts such as gym memberships, credit cards, personal loans, pay day loans, Telkom accounts, cell phone accounts, store accounts, vehicle finance.

Prescribed debt continued The term for prescription for mortgage bonds and judgementd is 30 years. It’s not illegal for credit providers or collectors to attempt to collect

prescribed debt; it’s up to the consumer to be aware of prescription and raise prescription

as a defence. When the consumer does this, their files should be closed. These companies are required to produce the original copy of the credit

agreement, (signed by the consumer), a statement of payments made (reflecting the last payment made), and proof of the handover of the agreement with accrued interest and costs.

Costs and interest may not exceed the amount of the original debt. Creditors and debt collect are not permitted to list you on the credit bureau

for prescribed debt. Not all debt is prescribed. The normal Prescription rule does not apply to debts owed to the State;

such as: Tax, Municipal Debt, TV Licences and Loans from the State ‘’ The National Credit Amendment Act, published 13 March 2015,

prohibits the sale and collection of Prescribed Debt”, a debt collector

 

Judgements Judgements/Recession of Judgements Any credit provider can sue a consumer in the Civil or Supreme Court for

a debt that has not been paid. A credit provider can be a hospital, a bank, a retail store or any entity claiming that money has not been paid towards the debt.

A consumer ‘defendant’ has the opportunity to defend themselves once they have been served with a Summons from the Plaintiff ‘Credit Provider’ within the period stated on the summons. The consumer can respond in order to make a payment arrangement or any dispute regarding the debt.

If you don’t respond within the required time, the Credit Provider can ask for a decision or judgement in your absence. This is called a default judgement.

Our Attorneys are able to make an application to have the judgements rescinded in Court. The consumer is required to obtain written consent to rescission of judgement from the Credit Provider. If the debt, costs and interest has been settled, it is unlikely that the Credit Provider will object to the recession of judgement.

D C ADEBT

COUNSELLING ASSOCIATES