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You are here: Home » Debt Relief

Debt Relief

  • Debt Counselling
  • Debt Mediation
  • Debt Administration
  • Sequestration
  • Reckless Lending Assessment
  • Interest Recalculation
  • Prescription Inquiry
What is Debt Counselling?
Debt Counselling is a process that is intended to help restructure the debt obligations of consumers who cannot pay their debts. A repayment plan that is affordable to the consumer and acceptable to the creditor is developed by a Debt Counselor and made an order of Court. All monthly debt obligations are consolidated into one monthly installment.

What are the benefits of Debt Counselling?
• If not already listed, you will be protected from being blacklisted;
• Credit Providers must communicate with us, not you.
• Repossession of your assets will be prevented where possible – this includes retaining the home and a vehicle where possible;
• You will pay only one affordable monthly installment
• Debt Counselling provides you, the consumer, with an acceptable standard of living while repaying your debts;
• Your debts will be reduced to manageable levels;
• Debt Counselling provides you with an agreed, affordable and realistic monthly budget in order to resolve the situation in the shortest possible time
• Improved overall financial position.

What will a Debt Counsellor do for me?
• Give you budget advice;
• Restructure your debts;
• Negotiate with credit providers, on your behalf, to lower your installments
• Reduce your debts to manageable levels with the aim of improving your overall financial situation;
• Refer you to an independent Financial Advisor to provide advice and guidance on insurance, be it health or life.
• Provide you with basic information necessary to resolve your day-to-day credit problems, to avoid being caught in the same debt trap;
• Provide you with support and after-care services such as budgeting skills; and
• Monitor your payments to credit providers.

What is Debt Mediation?
Debt mediation is a process that is intended to help consumers who are experiencing a cash flow problem that might only last a few months. An alternative arrangement affordable to the consumer and acceptable to the creditor is made on the consumer’s behalf.

What are the benefits of Debt Mediation?
• If not already listed, you will be protected from being blacklisted;
• Legal action, including repossession of your assets will be prevented where possible;
• Alternative arrangements will be made with your credit providers, on your behalf, to lower your installments;
• If you are over indebted, we can, instead of taking your case to court, apply the industry restructuring rules. If the rules are applied correctly, credit providers that are members of the NDMA are obliged to automatically accept the proposal;
• You will be provided with an agreed, affordable and realistic monthly budget in order to resolve the situation in the shortest possible time;
• Improved overall financial position.

What will you do for me?
• Give you budget advice;
• Give you legal advice;
• Restructure your debts;
• Explain your situation to your credit providers, on your behalf, and make arrangements to lower your installments;
• Make realistic arrangements so that you can stick to the payments agreed upon;
• Provide you with basic information necessary to resolve your day-to-day credit problems, to avoid being caught in the same debt trap;
• Provide you with support and additional services such as budgeting skills. An independent Financial Advisor is also available to provide advice and guidance on insurance, be it health or life.

What is Debt Administration?
Debt Administration is a process that is intended to help restructure the debt obligations of consumers who cannot pay their debts, have judgments or do not qualify for Debt Counselling. A repayment plan that is affordable to the consumer is developed and made an order of Court. All monthly debt obligations are consolidated into one monthly installment  An Administrator is appointed to manage payments to creditors.

What are the benefits of Debt Administration?
• If not already listed, you will be protected from being blacklisted;
• Credit Providers must communicate with us, not you.
• Repossession of your assets will be prevented where possible;
• You will pay only one affordable monthly installment;
• Debt Administration provides you, the consumer, with an acceptable standard of living while repaying your debts;
• Your debts will be reduced to manageable levels;
• Debt Administration provides you with an agreed, affordable and realistic monthly budget in order to resolve the situation in the  shortest possible time

What will an Administrator do for me?
• Give you budget advice;
• Restructure your debts;
• Apply for a court order to lower your installments
• Reduce your debts to manageable levels with the aim of improving your overall financial situation;
• Provide you with basic information necessary to resolve your day-to-day credit problems, to avoid being caught in the same debt trap;
• Provide you with support and additional services such as budgeting skills; and
• Manage payments to your credit providers.

An independent Financial Advisor is also available to provide advice and guidance on insurance, be it health or life.

What is Sequestration?
Sequestration is a process intended for consumers so over-indebted that no reasonable proposal can be made to creditors. Sequestration is a high court application that is handled by an attorney. A Trustee is appointed by the Master of the High Court and assets sold in order for the proceeds to be distributed to creditors. In some cases, Sequestration may be the only method to relieve the burden of debt.

What are the benefits of Sequestration?
• Creditors must communicate with us, not you, once the sequestration process has started;
• Once notified, you do not have to make any further payments to creditors;
• Legal action is prevented and no attachment can take place once a Notice of Surrender has been published;
• Your salary cannot be attached (“EAO” – emoluments attachment order / “garnishee” order) and all existing orders and deductions for debt must be cancelled;
• After finalisation of the process, the balances of unpaid debt must be written off by creditors;
• Creditors may no longer demand payment from you;
• You may apply to the Court for a Rehabilitation Order, 3 (three) years after date of sequestration, restoring your financial standing.

What will you do for me?
• Give you budget advice;
• Give you legal advice;
• Deal with Creditors on your behalf;
• Deal with Attorneys representing Creditors on your behalf;
• Provide you with basic information necessary to avoid being caught in the same debt trap; and
• Provide you with support and additional services such as budgeting skills;

An independent Financial Advisor is also available to provide you with a tailor made solution for your new beginning, be it health or life.

What is Reckless Lending?
The National Credit Act requires a credit provider to ensure that a consumer can afford the credit he/she applies for before granting him/her the loan or selling the goods on credit. If the credit provider fails to ensure this, then the agreement can be regarded as reckless.
Credit is lent recklessly if:
• The credit provider does not do a proper assessment to ensure that the consumer can afford the loan,
• The credit provider grants the consumer the loan despite the consumer not being able to afford the loan, or
• The consumer does not understand his/her rights and obligations in an agreement, as well as the costs involved in taking the loan.

What are the benefits of Reckless Lending Assessments?
• Your right to the prohibition of reckless lending will be asserted;
• Once notified, credit providers must communicate with us, not you;
• If an agreement is found to be reckless, the Court will:-
   Make an order setting aside all or part of the consumer’s rights and obligations;
   Suspend the force and effect of that credit agreement;
• Where the Court makes the above orders:-
   You do not have to make any further payment to the responsible credit provider;
   The responsible credit provider may not demand any payment from you;
   No interest, fee or other charge under the agreement may be charged to you.
• Enjoy significant advantages resulting from reduced repayment obligations

 

What will you do for me?
• Conduct assessments to determine if grounds exist to regard any of your credit agreements as reckless;
• Give you legal advice;
• Deal with Creditors on your behalf;
• Deal with Attorneys acting for Creditors on your behalf, where necessary;
• Provide you with basic information necessary to avoid being caught in the same trap; and
• Provide you with support and additional services such as budgeting skills.

Why may an assessment and/or recalculation be necessary?
As a South African consumer, you have the right to regulated fees and interest on all credit agreements. The National Credit Act regulates interest rates, initiation fees and service fees by:-
• specifying maximum interest rates that credit providers may charge you;
• specifying the maximum initiation fee that credit providers may charge you; and
• specifying the maximum fees that credit providers are allowed to charge and how often the fees can be recovered.
The National Credit Act also stipulates that once a consumer is in default, the sum of the following may never exceed the outstanding capital balance owed at the time of default:-
• service fees;
• interest;
• cost of credit insurance;
• default administration charges; and
• collection costs

What are the benefits of assessment and/or recalculation?
• Once notified, credit providers must communicate with us, not you;
• Should credit providers not comply with the provisions relating to maximum rates and fees stipulated in the Act, the National Credit Tribunal may:-
 declare a contract unlawful and therefore in effect null and void.
 all payments made by you will have to be refunded together with the prescribed interest of 15.5% per annum.
 credit providers will not have any claim for damages arising from the depreciation of goods sold to you.
• Credit providers have to write off the balance or refund you when:-
 the sum of interest, charges and costs > outstanding debt at time of default;
• Enjoy the advantages resulting from reduced repayment obligations.

What is Prescription?
It means that when debts are old, debtors are no longer legally obliged to pay. Sadly, many South Africans do not know that some debts prescribe. The Prescription Act 68 of 1969 regulates prescription. The Act is comprehensive, but in essence, most debt is deemed to have prescribed if;-
• It has been three years since your last payment, and
• in that time you have not acknowledged the debt in any way, or
• been summoned in respect of the debt.
Certain debt does not prescribe, such as municipal debt, mortgage debt (home loans), TV licence debt and taxes. However, most of the debts currently being “chased” by debt collectors and credit providers – such as clothing accounts, gym memberships and personal loans – do prescribe after three years of inactivity.

What are the benefits of a Prescription Inquiry?
• Once notified, credit providers must communicate with us, not you;
• You do not have to make any payments to creditors in respect of prescribed debt;
• After finalisation of the process, the balances of unpaid debt must be written off by creditors;
• Creditors may no longer demand payment from you for prescribed debt;
• If blacklisted for prescribed debt, the listing must be removed.
• Enjoy the advantages resulting from reduced debt obligations.

What will you do for me?
• Conduct assessments to determine if any of your debts have prescribed;
• Give you legal advice;
• Deal with Creditors on your behalf;
• Deal with Attorneys acting for Creditors on your behalf, where necessary;
• Provide you with basic information necessary to avoid being caught in the same trap; and
• Provide you with support and additional services such as budgeting skills.

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