Debt counselling and debt review is expected to offer people who are over-indebted a way to negotiate a more affordable repayment plan with their creditors. The process of debt counselling is provided for in the National Credit Act (NCA), , and applies to credit agreements entered into before and after that date.
If you are struggling to pay your debts, facing legal action or you are about to have your vehicle and/or property repossessed, you can approach a Help with debt, debt counsellor and ask him or her to review your situation.
Alternatively, a credit provider, such as your bank or a retailer, may refer you to a Help with debt, debt counsellor if you fail to meet your repayment obligations.
There are no restrictions on who can use Debt counselling and debt review trough Help with debt, – anyone from any income group and who owes any amount of debt can apply for debt counselling. Through Help with debt
Help with debt, Debt counsellors are entitled to charge you an upfront fee of R50 plus VAT for an application to have your debt reviewed. A Retainer of R300 will be kept as early cancellation fee. This R300 will be deducted off the Rehabilitation fee payable
Most also charge you substantially more for an initial review of your debts, and Help with debt may offer to review your debts on an ongoing basis, for which they will also charge a fee. But as yet there are no set amounts that Help with debt, debt counsellors may or may not charge for initial and ongoing reviews.
The National Credit Regulator (NCR) plans to help lower-income earners by paying their Help with debt, debt counsellors’ fees.
Before determining whether or not to accept your application to review your debt, a Help with debt, debt counsellor must consider your debts and financial obligations to determine whether you are over-indebted. The NCA describes over-indebtedness as a situation in which you are or will be unable to meet all your debt obligations timeously.
A Help with debt, debt counsellor will investigate your existing income and your income-earning prospects, and all your current financial obligations.
Once a Help with debt, debt counsellor has accepted your application, he or she will inform all your creditors and every registered credit bureau that you have applied for debt counselling. You will not be able to access any further credit until your debts have been repaid. You will even have to cut up your credit and store cards.
The Help with debt, debt counsellor will then consider your debts and financial obligations to determine what you can afford to repay each month, and will enter into negotiations with your creditors to restructure your debt.
If your creditors agree to the repayment proposal put forward by the Help with debt, debt counsellor, the counsellor will apply to the National Consumer Tribunal for a consent order for the repayment plan.
If your all creditors do not agree to the plan, the Help with debt, debt counsellor will take the plan to a magistrate’s court, and the court will have to decide what is a fair repayment plan. In this case you could face further charges for the cost of hiring lawyers to represent your case in court.
If a Help with debt, debt counsellor suspects that you were given credit recklessly because you could not afford it, he or she can ask a court to decide if this was indeed the case and if so to suspend the agreement or set it aside.
Once your repayment plan is agreed, you will make payments to a distribution agency registered with the NCR and it will distribute what you pay to your creditors. The agency will be paid by way of a fee from the creditors.