Debt Couselling

Debt Counselling is the process, in terms of the National Credit Act, 34 of 2005, through which your debt counsellor negotiates with your credit providers, on your behalf, to resolve your over-indebtedness, by:

  • Reducing your monthly debt repayments to one affordable monthly instalment;

  • Reducing contractual interest rates;

  • and extending the repayment periods.

During the abovementioned process your debt counsellor assesses your individual financial circumstances to determine your over-indebtedness by taking into account your income, necessary living expenses and your contractual monthly payments towards credit providers.

Once it is determined that you are over-indebted a recommendation can be made by the debt counsellor to your credit providers and the court for the restructuring of your debt repayments.

Over-indebtedness is a term used to indicate that you (the consumer) are unable to meet your contractual debt obligations timeously after a calculation is made taking into account your income, essential living expenses and contractual debt instalments.

The process includes the following steps:

  1. Consultation is held between the consumer (you) and Debt Counsellor;

  2. You apply for Debt Review by completing an application form know as a Form 16 with supporting documentation, at this point you are legally protected from legal action by credit providers;

  3. The Debt Counsellor informs your Credit Provides, the Registered Credit Bureaus and the National Credit Regulator that you have applied for Debt Review;

  4. The Debt Counsellor sends out a Form 17.1 to your credit providers confirming your application for debt review and requests a Certificate of Balance for each of your accounts;

  5. Once the Certificate of Balances is received the Debt Counsellor can make the necessary calculations to determine your over-indebtedness, if the Debt Counsellor find that you are over-indebted a form 17.2 is sent to credit providers confirming your successful application;

  6. A proposal containing the restructuring of your debt repayment is drafted and sent to your credit providers for their perusal and acceptance. The process includes negotiations between the debt counsellor and the credit providers to reach an agreement on the proposed restructured payment.

  7. Our specialist specialized attorney will bring an application to court to obtain a court order, confirming the restructuring of your debt repayment. (The application process is now complete and you must ensure that your new monthly restructured debt instalment is paid timeously in order to prevent Credit Providers from taking action against you.)

  8. Monthly payments are monitored by your Debt Counsellor;

  9. Once debt is paid in full the debt counsellor issues a clearance certificate confirming all debt is paid in full.

Once you have applied for Debt Review by completing the application form (Form 16) you will be protected from legal action by your credit providers in terms of the National Credit Act, 34 of 2005. This protection is subject to your participation and successful completion of the Debt Review process.

We offer a free consultation enabling you to make an informed decision.

Cost are discussed during the consultation and is regulated by the National Credit Regulator and paid from your reduced monthly debt instalment.

The duration depends on your total amount of debt, the amount you have available for restructuring and the type of debt you have (secured or unsecured debt). Secured debts are for example: house bonds and vehicle finance and unsecured debts are for example: credit cards, overdraft facilities and personal loans. Unsecured debts are normally paid within 60 months where secured debts depend on the amount outstanding and contractual term of the specific debt.

All payments are made to a Payment Distribution Agent (PDA) regulated by the National Credit Regulator and distributed in terms of the payment plan drafted by the debt counsellor.

  • Original id / passport

  • Proof of residence / water and electricity statement

  • Latest 3 month’s salary advice / payslip

  • Latest 3 month’s bank statements

  • Contract if married out of community of property / marriage certificate

  • Most recent account / statements from credit providers (We need account numbers where possible, and monthly instalments)

  • Information relating to any judgments / debt collectors

  • As much information as possible regarding monthly budget (income and expenses)