Paying for your debts can be a challenge and a task that requires assistance from relevant authorities that come up with laws that are designed to bail you. The intension of the law is to assist consumers who find it difficult to meet their obligations towards debt repayments and still be able to provide for their own and/or family needs on a monthly basis.
- How can the Act help you?
By using the above act any registered Debt Counsellors will be able to protect you as the consumer against possible legal action that your creditors are allowed to take by law as set out in Section 129 of the same act.Once they have registered you as having applied for Debt Review, the creditors have to follow the procedures as contemplated in the act. This means all phone calls demanding payments have to stop and no legal action can be instituted.
- How does Debt counselling work?
The act enables the Debt Counsellor to measure your financial situation; this mainly means they will reflect on the total income generated by you / the family unit and they will compare this to the monthly expenses needed for you / your family to be able to ensure the basic living costs are covered e.g. housing, water and electricity, food, transport, schooling etc. Luxury items such as DSTV, domestic services, garden services have to be excluded.Once the above calculation has been made they will now look at the remaining amount which is available to repay the debt. If a reasonable amount is available, they will use it to negotiate new repayment terms with the credit providers. This will mean that you will be able to pay less to your creditors every month in order to gather your basic needs as mentioned above. It is vital to note that the amount being used to negotiate new terms should be enough to sufficiently cover the interest in order to get rid of the debt within a reasonable period.
- Does it mean I will be blacklisted?
To be placed under Debt Review does not mean you are blacklisted. It simply means a flag with all credit providers to tell them they are no longer allowed to provide you with more credit until such time that the existing loans/credit agreements are paid in full. Once the loans have been fully paid, the flag is removed and you will be entitled for credit with immediate effect – there is thus no rehabilitation period at all. Please note that it is possible that one or more of your credit providers have already blacklisted you and they will only remove you from the blacklist once the outstanding amount has been paid in full.
- What steps must I follow if I need assistance?
Supply them with a comprehensive list of all the Creditors you have as per the supplied form. Please note you have to include all creditors – do not leave anyone out no matter how small the amount you owe them. Provide them with your monthly expenses – Budget Sign the Letter of Consent. This allows them to ask your creditors for all the relevant information regarding the credit agreement/s with them. Provide them with copies of your ID and that of your Spouse if applicable
Provide them with copies of your payslip and that of your Spouse if applicable.
- How much does it cost?
Everything done for you at free cost; once you fully understand the process involved and you are certain that this process will be of advantage to you, you will begin with payments. Information of the payments will be availed to you during the consultation meeting but you do not have to worry yourself with payments at this point, as all the fees that need to be paid by you will be derived from the first two monthly instalments you make. It will not be required to save up or “loan” money for the process to get going. These aspects will however be explained to you in detail during the consultation meeting.