Our program
How the program works
Everybody does not qualify for debt counselling
Over Indebted?
This is when your total monthly debt payments exceed the balance derived by deducting your minimum living expenses from your Netto income.
When an individual is over indebted, they will not able to service their debt in an acceptable manor and this could result in an increase in obtaining additional loans in order to repay existing debt, creating a snow ball effect where the individual will not be able to repay debt in the end. Arrears will result in an increase in accumulating interest as a result of short or no payments, accounts will be handed over to attorneys or collectors, increasing the outstanding balance with additional costs, which will place further stress on an already burdened individual.
Debt counselling does not cancel your debt, it helps you to make reduced payments, using your disposable income.
In order to apply a consumer must be employed and have an income which will be used to offer reduced payments to credit providers.
It is important to ensure that the correct financial information is disclosed at the time of the application as this can have an impact on the outcome.
If you are married in community of property, you must apply jointly with your partner
This Program is a Regulated By The National Credit Regulator (NCR) and Supported by the South African Government under a statutory relief process provided for by the National Credit Act 34 of 2005 and the National Credit Amendment Act 19 of 2014. The National Credit Act offers debt relief to over-indebted consumers through the debt review process. Debt review, better known as Debt Counselling, is designed to do three things for consumers: It assists consumers who are overstretched with their credit repayments, to make ends meet, by providing a means to negotiate new repayment arrangements with creditors.
How the program works
Consumer
makes an enquiry
The Consumer contact our registered Debt Counsellor, who will explain the process and gain information. A free credit report will be drawn and provided to the consumer.
Consumer apply for DC (Form 16)
A form called (Form 16.1) will be giving to the consumer to complete in order to obtain their details of debt and budgetary requirements. Consent form will also be attached in order to draw an ITC report.
Creditor's notified of
Debt Review Application
Should the Debt Counsellor accept the consumer’s application after the affordability assessment creditor providers will be notified of the application
Creditors provide
Balance of account
The consumer’s creditors will be contacted to provide the certificate of balances, where outstanding balances, interest rates, credit life premiums where applicable and term of repayments will be confirmed.
Affordability
Assessment
The Debt Counsellor will then do a comprehensive assessment and work out a personal budget for the consumer.
Over-Indebtedness Assessment
The Debt Counsellor will then use their knowledge of the debt industry and assess if the consumer is over-indebted. Credit providers will be informed. Client will be flagged on ITC as under debt counselling and will not be able to obtain further debt during this process.
PDA & Creditors gets initial Payment Proposal
A proposal will be send to the Payments distribution agency and the Creditors of the consumer. This proposal will include the budget and the assessed payment premium.
Creditors Accept or Reject Proposal
An initial proposal will be sent to the credit providers in line with the client’s affordability. Creditors will then have the option to accept or reject the proposal or offer a counter offer.
Final Payment Proposal & Court Application
As soon as acceptances are negotiated, the file will be referred to the attorney who will apply for a Court consent order. As soon as Consent is obtained accounts will be re structured as per Consent granted.
Monthly Debt
Repayment
A monthly agreed premium will then be paid by the consumer to the Payments distribution agency via Debit order, who will then distribute payments to all the creditors. A distribution statement will be sent to the consumer on a monthly basis and if they don’t receive it the Debt counsellor will forward them a copy.
Clearance Certificate
Issued
Once Debt has been repaid, the debt counsellor will request paid up letters from the creditors. A clearance certificate will be issued to the consumer, Credit bureau will be informed and the Debt Review Process will be removed from the consumer’s credit report.
FINAL STEP
A Debt Free Consumer
The consumer will now be free from debt obligations and will have a clear credit report. The consumer will be free from debt.