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Debt Review

National Credit Act

Debt Review started when the National Credit Act, Act 34 of 2005 (“NCA”) was promulgated during 2006.

Section 79(1) of the NCA refers to over-indebtedness.

 

Over-Indebtedness

When you experience a financial situation whereby you don’t have the financial means to satisfy, in a timely manner, all the obligations you have under existing credit agreements.

 

Credit Agreements

When you enter into a credit agreement with a Credit Provider you are bound by the terms and conditions of the agreement.
The Credit Provider granted you credit, whether in the form of an unsecured or a secured loan. You are therefore bound by the agreement and for the repayment of the capital amount, fees, interest and applicable credit life insurance which form part of the credit agreement.

Payment Default

When you default on the credit agreement payments, the Credit Provider will start a process for the collection of the arrears, which my result in legal action.

 

Debt Counsellor

When you are facing financial strain and you apply for Debt Review, we will, on your behalf, communicate with your credit providers and present them with a more affordable repayment plan and through the formal debt review process approach the Court or Tribunal to have you formally declared over-indebted.

We are the facilitator in the process that involves you, your Credit Providers and the Court/Tribunal.

How do you know if you are over-indebted

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Your income and expenses are out of balance.

You are currently in arrears with payments to your creditors.

You cannot afford to pay all or some of your creditors.

After paying your creditors, you do not have sufficient money left for living expenses such as school fees, transport, water and electricity, property rent and most importantly food.

Your monthly budget barely cover all your expenses and a slight increase in any of your expenses will result in a deficit on your budget.

You applied for credit and was refused due to your current affordability assessment.

The Benefits of Debt Review

You have more money available for your essential living expenses.

You are only paying one reduced instalment towards all your credit agreements.

Interest rates are reduced meaning you pay more on capital and less on interest.

In many cases you no longer pay the monthly credit agreement service fees.

The process protect you against legal action.

Your assets are safe and secure.

No more phone calls from creditors.

We communicate with the creditors on your behalf.

Ultimately – financial peace of mind.

Disadvantages of Debt Review

Whilst under debt review you will no longer be allowed to enter into any credit agreements.

A debt review flag will be listed on your credit bureau profile.

Even one default on a debt review payment may cause the credit providers to terminate the process and revert back to the original credit agreement.

Debt Review Court /Consent Orders cannot be rescinded and you will remain under debt review until all credit agreements are paid in full, except for mortgage agreements.

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When to apply for Debt Review

The moment you are experiencing or foresee symptoms of over-indebtedness.

You received a Section 129 letter from one or more of your credit providers.

Sooner than later. Take action before your finances get out of hand.

How do I qualify for Debt Review

You must be over-indebted

A natural person over 18.

Citizen of South Africa with a valid SA Identity Document or Passport.

Employed or at least have some form of regular income.

Must have credit agreements in South Africa.

Not currently under Sequestration or Administration.

When married in Community of Property both husband and wife must qualify and apply for debt review.

Which accounts are included for Debt Review

Any secured or unsecured credit agreement provided by a NCR registered Credit Provider.

Such as Mortgage Agreements, Vehicle Agreements, Personal Loans, Overdraft Facilities, Credit Cards, Revolving Credit Plans, Store Cards and Pay-Day Loans.

Which accounts are excluded from Debt Review

SA Revenue Service, Municipality Bills and Educational Institutions.

Prescribed Debt.

Accounts with prior legal action.

Money owed to relatives or friends.

Juristic Person accounts.