Frequently asked Questions:
What happens if I don’t pay my debt?
The Credit Provider will:
· Issue a section 129 letter so it will block any Debt Counselling
· Issue a Summons
· Take Judgment
· Garnish on your salary (Take the portion of your salary before you get it)
· Severely damage your credit credibility
· Attach Furniture, vehicle or assets and sell them on auction to recover funds
What is the difference between Debt Counselling Administration and Liquidation?
· Debt Counselling: Debt Counsellors restructure instalments to allow the consumer to pay his/her debt and meet his/her basic living expenses
· Administration: Only possible for debt less than R50 000.00, where instalments are reduced, with creditors only receiving payments every three months. The Term of repayment is much longer than that under Debt Counselling.
· Liquidation: Is a legal process where assets are sold. The Court will appoint somebody to manage your finances. This is costly, leaving you blacklisted for years or until the Court declares you rehabilitated.
Will I still be able to get credit while I am under Debt Counselling?
No – You’re name is flagged which notifies credit providers that you are under Debt Counselling and that you are over-indebted.
Will I be blacklisted while under Debt Counselling?
No – You’re name is flagged but NOT blacklisted and this is removed once you’re debt has been paid up.
How long will I be flagged as being under Debt Counselling?
Once the debt has been repaid, we will issue a clearance certificate in accordance with the NCA (National Credit Act) and instruct the credit bureau to expunge the Debt Counselling notation from your record. This means that all records that you were under Debt Counseling are completely removed.
Can a consumer see a Debt Counsellor if they have received a letter of demand?
Yes, a consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot do anything.
What happens if I receive a letter of Demand from my Credit Provider?
You have less than 20 days to see a Debt Counsellor for help to stop them from taking any legal actionYes, a consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot do anything.
Can I do my own Debt restructuring?
Yes, you can do an informal negotiation, however, you will not have the force of the NCR (National Credit Regulator) and the NCA (National Credit Act) supporting your negotiations and the credit provider knows this. They will proceed with legal actions behind the scene and once their legal process is in place, you will have lost the opportunity to use Debt Counselling to your advantage. Note that you will not have access to clearance certificates that clear your name once the debt has been repaid. Well trained Debt Counsellors have the ability and knowledge to restructure your repayments, submit proposals and negotiate with credit providers after which we will have the new agreement made legal by LAW in accordance with the NCA.
What does it cost?
The Debt Counsellor may receive the following amounts in respect of consumers with an individual gross income of more than R2 500.00 per month or household income of more than R3 500.00 per month. The only upfront fee is the statutory application fee of R50.00 The Debt Counsellors take their professional fee from your first repayment. This fee is the lesser of the first instalment of the debt re-arrangement plan or up to R6000.00 (excluding Vat). Should a joint application be required the fee will remain less than R6000.00 (excluding Vat).A monthly aftercare fee of 5 percent of disbursement with maximum of R400.00 (excluding Vat) per month. These amounts will be taken into account in the proposed repayment plan. Legal fees must also be paid. This cost is defined up front and will be taken into account in the proposed repayment plan, so you will not have to find the cash for these costs.
What accounts can be included in a Debt Review process with a Debt Counsellor?
All credit agreements can be included but not service agreements such as water and lights accounts or cell phone accounts. Any accounts on which judgment has been taken cannot be included.
Why can a Garnishee (Emolument Attachment Order) not be included?
It is already a Court Order and only a Court can make a change to the Court Order
What is the difference in the case of Sequestration or Judgment?
Sequestration
• There are costs associated with sequestration and your creditors will have to pay them out of your insolvent estate.
• It allows you to write off some of your debt or most of it.
• You lose all your assets.
• It is highly unlikely that you will be able to get credit again without the approval of The trustee (the person appointed by the court to manage your assets).
• You will have to apply to be rehabilitated later, which is not that easy. Usually not before 4 years have elapsed. This means that during the 4 years you cannot qualify for a loan or enter into any credit or financial agreements. Even once you have been rehabilitated you will battle to get credit for another 5 years as the notice of rehabilitation which gets added to your credit record will discourage creditors from lending to you even though they are now allowed to.
• You must first persuade your creditors that sequestration is the best option for them too. Because they pay something towards the costs, they can refuse to do this and then you have to go for the second option.
Judgment
If you are unable to pay your debt and you do nothing, it is very likely that your creditors will take judgment against you. The effect of this could include the following:
• They can attach your assets.
• They can demand a portion of your monthly salary or garnishee order.
• You are listed on the credit bureau.
• The judgment stays in place for 30 years. This means that your creditor has 30 years to collect the debt from you.
What happens if I don’t pay my debt?
The Credit Provider will:
· Issue a section 129 letter so it will block any Debt Counselling
· Issue a Summons
· Take Judgment
· Garnish on your salary (Take the portion of your salary before you get it)
· Severely damage your credit credibility
· Attach Furniture, vehicle or assets and sell them on auction to recover funds
What is the difference between Debt Counselling Administration and Liquidation?
· Debt Counselling: Debt Counsellors restructure instalments to allow the consumer to pay his/her debt and meet his/her basic living expenses
· Administration: Only possible for debt less than R50 000.00, where instalments are reduced, with creditors only receiving payments every three months. The Term of repayment is much longer than that under Debt Counselling.
· Liquidation: Is a legal process where assets are sold. The Court will appoint somebody to manage your finances. This is costly, leaving you blacklisted for years or until the Court declares you rehabilitated.
Will I still be able to get credit while I am under Debt Counselling?
No – You’re name is flagged which notifies credit providers that you are under Debt Counselling and that you are over-indebted.
Will I be blacklisted while under Debt Counselling?
No – You’re name is flagged but NOT blacklisted and this is removed once you’re debt has been paid up.
How long will I be flagged as being under Debt Counselling?
Once the debt has been repaid, we will issue a clearance certificate in accordance with the NCA (National Credit Act) and instruct the credit bureau to expunge the Debt Counselling notation from your record. This means that all records that you were under Debt Counseling are completely removed.
Can a consumer see a Debt Counsellor if they have received a letter of demand?
Yes, a consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot do anything.
What happens if I receive a letter of Demand from my Credit Provider?
You have less than 20 days to see a Debt Counsellor for help to stop them from taking any legal actionYes, a consumer should visit a Debt Counsellor urgently if they receive a letter of demand. Debt Counsellors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot do anything.
Can I do my own Debt restructuring?
Yes, you can do an informal negotiation, however, you will not have the force of the NCR (National Credit Regulator) and the NCA (National Credit Act) supporting your negotiations and the credit provider knows this. They will proceed with legal actions behind the scene and once their legal process is in place, you will have lost the opportunity to use Debt Counselling to your advantage. Note that you will not have access to clearance certificates that clear your name once the debt has been repaid. Well trained Debt Counsellors have the ability and knowledge to restructure your repayments, submit proposals and negotiate with credit providers after which we will have the new agreement made legal by LAW in accordance with the NCA.
What does it cost?
The Debt Counsellor may receive the following amounts in respect of consumers with an individual gross income of more than R2 500.00 per month or household income of more than R3 500.00 per month. The only upfront fee is the statutory application fee of R50.00 The Debt Counsellors take their professional fee from your first repayment. This fee is the lesser of the first instalment of the debt re-arrangement plan or up to R6000.00 (excluding Vat). Should a joint application be required the fee will remain less than R6000.00 (excluding Vat).A monthly aftercare fee of 5 percent of disbursement with maximum of R400.00 (excluding Vat) per month. These amounts will be taken into account in the proposed repayment plan. Legal fees must also be paid. This cost is defined up front and will be taken into account in the proposed repayment plan, so you will not have to find the cash for these costs.
What accounts can be included in a Debt Review process with a Debt Counsellor?
All credit agreements can be included but not service agreements such as water and lights accounts or cell phone accounts. Any accounts on which judgment has been taken cannot be included.
Why can a Garnishee (Emolument Attachment Order) not be included?
It is already a Court Order and only a Court can make a change to the Court Order
What is the difference in the case of Sequestration or Judgment?
Sequestration
• There are costs associated with sequestration and your creditors will have to pay them out of your insolvent estate.
• It allows you to write off some of your debt or most of it.
• You lose all your assets.
• It is highly unlikely that you will be able to get credit again without the approval of The trustee (the person appointed by the court to manage your assets).
• You will have to apply to be rehabilitated later, which is not that easy. Usually not before 4 years have elapsed. This means that during the 4 years you cannot qualify for a loan or enter into any credit or financial agreements. Even once you have been rehabilitated you will battle to get credit for another 5 years as the notice of rehabilitation which gets added to your credit record will discourage creditors from lending to you even though they are now allowed to.
• You must first persuade your creditors that sequestration is the best option for them too. Because they pay something towards the costs, they can refuse to do this and then you have to go for the second option.
Judgment
If you are unable to pay your debt and you do nothing, it is very likely that your creditors will take judgment against you. The effect of this could include the following:
• They can attach your assets.
• They can demand a portion of your monthly salary or garnishee order.
• You are listed on the credit bureau.
• The judgment stays in place for 30 years. This means that your creditor has 30 years to collect the debt from you.
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