Debt Review was implemented by the National Credit Act (NCA) as a legal debt relief process. How it works is your Debt Counsellor proposes a reorganised debt repayment plan to your Credit Providers, allowing you to make just one lower payment towards all your debts each month. This plan is then declared a legally binding Court Order.
Thereafter, you will pay one affordable payment directly to a Payment Distribution Agency (PDA) once monthly. This payment will cover all of your unsecured debts and the PDA will divide it up between all of your credit providers.
If a secured Debt Is added part of the Debt Review process, We can negotiate better payment plan on your Secured asset and once all unsecured Debts are paid up, your debt counsellor will issue you with a clearance certificate. The credit bureaus and your credit providers will also be advised that you have completed the Debt Review process.
Accordingly, your credit profile will no longer show that you are under Debt Review and you will be able to apply for credit once again.
As a rule, you should contact us as soon you miss a payment and don’t see yourself being able to make any of upcoming payments. The sooner you get in touch the better – you have nothing to lose by doing so, but a lot to lose by putting it off. Just being on our website indicates that your debt situation is spinning out of control and you are in need of assisstance.
Your credit providers will be notified that you have entered Debt Review with Debt Mate within 2 – 5 days. Naturally, we aim to do this ASAP because as soon as we do, the law prevents them from contacting you.We will deal with your credit providers for you from that point on.Be warned that not all credit providers operate by the book, so if they do keep harassing you, just let Debt Mate know and we’ll make sure it does not happen again.
However, if your credit providers have already started legal proceedings against you with regard to a certain unpaid debt, we cannot prevent them from contacting you. Nor can we include this debt in your restructured repayment plan or have your payments reduced.As such, you won’t be protected from legal action with regard to this specific debt. This is why it’s so important to get a hold of Debt Mate, before your credit providers commence with legal proceedings.
In order to qualify for debt review, you will need to be permanently unemployed. This lets your debt counsellor know that you have a regular income, and in turn, you are able to afford your debt at a reduced rate. Being permanently employed also gives your lack of affordability more credibility to your creditors, who are the ones who need to agree to your reduced rates negotiated by your debt counsellor.
This is why it is important for you to understand your financial situation and look for solutions before things get out of control. Here’s a list of qualifying requirements for those who are thinking about going under debt review:
Everyone has a different amount of money they owe. Everyone has different credit providers. Everyone has a different amount they can spend on debt every month. So, everyone’s debt review plan is different and takes a different amount of time to finish.
Many things determine how long you have to be under debt review, including:
No. This is to prevent you from incurring more debt, as the purpose of debt review is to reduce your debt and work towards becoming debt free. Once you have settled all of your debts, Debt Mate will issue you with a clearance certificate and you’ll be able to take out credit again. However, we do hope you will be far more cautious going forward!
As soon as you qualify for the process, your debt counsellor will contact the credit bureaus to let them know that you are officially under debt counselling. The bureaus will then add an ‘under debt review’ flag to your credit profile. Whenever you go to the bank or a lender to apply for credit, they will run a credit check. When you enter debt counselling, your credit profile will indicate this fact. So, when credit providers draw a copy of your credit report, it will show that you are under debt review and they will thus reject your credit application however once you have paid up all your debts, you will be free to start taking on new credit.
According to the withdrawal guidelines issued by the National Credit Regulator, neither a consumer nor a debt counsellor is permitted to terminate debt review.
You will then need to appoint an attorney who will need to obtain a court declaration order, declaring that you are no longer over-indebted. If a court order has already been issued, you will also need to appoint an attorney to rescind the court order on the basis that you are no longer over-indebted.
Alternatively if you are in a position to free up all your debts by settling your accounts if you have received a lump sum of money then Debt Mate can get settlement figures for you and assist you with ensuring your creditors payments are made and the debt counsellor will issue you with a clearance certificate. The credit bureaus and your credit providers will also be advised that you have completed the Debt Review process.
Accordingly, your credit profile will no longer show that you are under Debt Review and you will be able to apply for credit once again.
No! it will not, when placed under debt review all your accounts are frozen and the terms of repayment are negotiated by your debt counsellor. While you will receive better terms and longer repayment for the most part, you will still have to make payments each month. Missing these payments will be treated in the same way as before debt review. You will still gain interest and have to pay monthly, but the terms of the payment will be better suited to your situation, and therefore be easier to pay back monthly while affording to live, Every month as you pay toward your Debt Review balances, The balance will decrease and so will your Debt until all Debts are paid off and you become Debt Free.
For debt review to be fully implemented, a court order has to be granted. This order order is put in place to legally protect consumers and their finances from being hassled by credit providers, as well as to halt any legal action creditors could try take against them.
The process with regards to granting a court order for a debt review case varies according to the jurisdiction of the court it has been sent to. Certain courts require the actual debt review client to be present at the court at the time of the court order, however in the vast majority of cases, the Magistrate’s Courts would rather allow the matter to be dealt with by our attorneys in the correct jurisdiction, rather than have to deal with it in court.
If the court’s jurisdiction does demand that the client is present and the client is absent, then they have the right to not grant the debt review court order.
Debt counselling is a debt management process that was designed to help you if you are feeling overwhelmed by debt. At Debt Mate, your debt counsellor can arrange lower monthly instalments and reduced interest rates over an extended period of time. Debt counselling will help to ease the burden and provide you with immediate financial relief, leaving you with more money to cover your basic living costs. Debt counselling through Debt Mate will enable you to take full control of your finances, so that you can enjoy a comfortable, debt-free life.
If you are over-indebted and battling to keep up with your monthly payments, you are probably looking for quick and efficient solutions. We understand your dilemma, which is why we will set up an affordable Debt Rescue programme to suit your specific needs. Our debt counselling experts will calculate a monthly instalment that will leave you with much-needed breathing room in your budget. As part of our debt review services, we will arrange reduced interest rates and monthly charges. We know that you are tired of trying to negotiate with your creditors. This is why we will take over the challenging job of dealing with them. We will handle all of your payment negotiations on your behalf.
If you are over indebted, with too much outstanding debt to make ends meet and not enough money to cover basic expenses, you need debt review and debt counselling from Debt Mate. A saving grace when you have stretched your finances too thin, the debt counselling process not only helps you get your debt in order, but also teaches you to be responsible with your cash after the process is done.
From budgeting to talking to your creditors, arranging court dates and sorting your documentation, debt counselling allows you to get a handle on your debt. From renegotiating new terms of repayment, finding the best terms to ensure you can afford to live, this allows you to sort your credit record out while still making ends meet from day to day. Often we get carried away with credit, piling it up before we consider repayment, but when you have taken on more than you can handle your money will quickly disappear.
If you need to pay out more than you bring in, you will find yourself in a tricky situation. Getting caught in the debt spiral, this is a hard place to get out of once you have started the downward spin – this is where Debt Mate comes in to help. If your debt is too much for you to pay while still having enough to survive, you need debt counselling and debt review.
While under debt counselling, your monthly payments will depend not only on your outstanding amounts but also the credit agreements put forward by your debt counselor. While signed with Debt Mate, one of our professional consultants will go through your budget and spend, advising on the best monthly payment amount based on your income and expenses.
After taking your expenses and needs into account, your debt counselor will allocate the remaining money towards paying off your debts. While some creditors may be happy to take on the new agreements, some may not and as such may keep the same rates, but this is all dependent on your unique debt situation.
Depending on which debt solution you choose, different regulations and rules are provided, although the differences are slight. With Debt Mate, we have rules and regulations to ensure that our clients receive the best possible service with complete transparency and understanding.
When applying for a debt solution like debt review, all credit bureaus and providers will be notified of your debt review status – this will also appear on your credit record. This ensures that all credit providers know your situation and do not commit reckless lending without realising. If you have chosen a less formal debt solution like debt management, only your current credit providers will be contacted about your status. This lets them know of the ongoing process and the future implications regarding your credit.
If you already have judgments against you, you can still contact Debt Mate for debt counselling needs, this does not stop you from seeking advice and consultations.
However, when approaching Debt Mate you must, in all cases, disclose all relevant information to your debt counselor beforehand. With a clear understanding of your situation, we can help you clear your debt, but without the info at hand there can be serious and unneeded repercussions from your credit provider. With an efficient system, we can help you get out of debt effectively, but in order to do this we need our client’s patience and cooperation.
If you are married in community of property, both you and your partner have to apply for debt counselling and undergo the process as a couple or single entity. When married in this way, you are legally classified as one single joint estate. Because of this, all assets and debts are considered as joint or shared by both parties. You both remain responsible for the repayment of the debt and you will both remain under the debt review process.
In short, if you are married in community of property both you and your partner need to apply for debt counselling.
If clients miss monthly repayments that fall under their debt review, if they are handling repayment, the credit providers may terminate the client’s debt review agreement. The creditor then has every right to start legal proceedings, which will include judgments and garnishee orders against the client’s outstanding amounts.
If clients are struggling to make their monthly repayment, it is best that they contact their Debt Mate counselor immediately, giving Debt Mate enough time to advise the credit providers of the client’s situation and work out a more affordable debt repayment plan in good time. As always, complete trust and openness is key, your debt counselor can only do as much as you let them. With all the information at hand, we can protect your and your livelihood, without disclosure, you open yourself up to possible disadvantages and repercussions.
When you are under debt counselling or debt review, you are legally protected from being harassed by your credit providers. If your creditors send you any legal documentation, it is recommended that you inform your debt counsellor.When you apply for debt counselling, your debt counsellor will contact all of your credit providers in order to confirm that the amount of debt that you have acquired is correct. They will also contact credit bureaus to let them know that you are under debt counselling and that your credit profile should be flagged. This is not like a blacklisting, this is simply a way of protecting you from creditors. Once you have paid all of your debt it will be removed from your credit profile and you will receive a credit clearance.If your creditors agree to the renegotiated repayment proposal offered by the debt counsellor, a legal consent order will be obtained. However, if one or more of your creditors disagree with the repayment terms, your debt counsellor will contact the magistrate court in order to determine an agreeable repayment term.
While there is no maximum time period that a client can be on debt counselling, at the Debt Mate, our consultants strive to get your debt matters resolved as soon as possible. The duration of time that you spend on debt counselling greatly depends on the amount of debt that you have acquired, the interest rates and the amount of money that you can pay your creditors every month. If you pay a greater amount back every month, your debt will be reduced at a faster pace, and you will become debt free before you even realise it.
While some consumers have reported being on debt counselling for up to 10 years, this is not good practice. A debt counsellor should endeavour to rehabilitate a consumer within 3 to 5 years. Therefore, it is important that your debt counsellor calculates a repayment plan that will reduce your debt to zero, in a reasonable amount of time.
Vehicle repossession has tremendous economic and social implications to any person. Many clients of Debt Mate have encountered such events before contacting us for help. This unfortunate experience is a sensitive, and perhaps, emotional event that has a deep impact to any household.
Everything becomes a bit more difficult, getting the children to school, getting to work, even getting household groceries! So understandably, clients expend their best efforts to hold on to their vehicle as much as they can.
First and foremost, remain calm. The bank or financing firm cannot just show up and repossess the vehicle, there is a legal process that must first be followed, and you need to understand it in order to protect yourself. You should know your legal rights and what the law dictates in a matter such as this. If you encounter such an event, get into contact with a Debt Mate Counsellor as quickly as possible!
Do not be intimidated when a debt collector trys to take possession of your car, and hands over a form for you to sign. You are under no obligation to sign such a form, also known as a “Consent to Voluntarily Surrender” letter, and hand the vehicle over to the debt collector. Know that any bank form that you sign, other than a Summons which would be delivered via the Sherriff of the court NOT a debt collector, is likely an agreement stating that you’re voluntarily giving the vehicle back.
Unfortunately debt collectors and credit providers often blatantly bully and harass consumers into signing such a letter. They threaten large amounts of legal fees and penalties that you will inccur if you do not sign the form. This is purely a scare tactic to make you give in, DO NOT SIGN. If such “debt collectors” threaten to call the police, invite them to do so, without a court order, these debt collectors cannot take any of your possessions and after you have declined to sign the form, they have no right to be in your property or even speak to you, if they continue, YOU call the police, harrassment and trespassing are both crimes in South Africa.
We want to make it blatantly clear that you are under no obligation to sign anything at this stage. Your first port of call is to contact a debt specialist such as Debt Mate or a legal aid that can review the matter and provide you with sound expert advice. Do not be rushed into making a dire legal decision before reviewing your options, such is your legal right!
There are two legal ways in which a bank, or vehicle finance company, can take possession of your asset.
To begin with a court order, which is known as a Warrant of Execution, must be obtained by the bank/finance house. This in turn will be an order from the court informing you to allow the creditor to take back possession of the vehicle. If there is no court order however, they cannot force you to give your car back, and that is the law!
You may give the vehicle back via voluntary surrender in terms of the National Credit Act. The voluntary surrendering of a vehicle is what most credit providers try to get consumers to do. Why? Because it’s the easiest, quickest and cheapest means for the credit provider to get their vehicle back.
This option is only a good one if you are not in arrears on your car installments, so pursue this option only if the vehicle is up-to-date with payments. If at this point end up in the situation where you find that you can no longer afford to pay for your vehicle, and not yet in arrears with the vehicle payments, you can choose to make use of Section 127 of the National Credit Act (NCA) and voluntarily surrender your vehicle.
To initiate this process, you must first provide written notice to your credit provider stating that you wish to terminate the credit agreement and that you require them to collect the vehicle. As stipulated by the National Credit Act, the credit provider must then deliver to you, a letter within 10 working days, indicating the estimated sale value of the vehicle. You may dispute the sale value if you are not pleased with it, you may then proceed by withdrawing your notice to surrender and resume possession of your vehicle once more.
When it comes to voluntary surrender, the bank/credit provider is obligated by the Act to sell the vehicle as soon as possible, and for the best price reasonably obtainable at the time. This is an important statement, because if your vehicles resale value is very low at that time, you cannot expect to get a reasonable price.It is also important to realise that when the vehicle is sold at an auction, you are still held liable to pay any shortfall if the vehicle is sold for less than the outstanding balance owed on the account. For example the repayment plan is valued at R90000 but the vehicle is sold for R60000, this means that you still owe the credit provider R30000 ! Quite literally you could end up paying for a vehicle you don’t even have in your possession anymore.
Ensure that you understand the terms and conditions of the Voluntary Surrender process, if you are uncertain about any part of it, contact a legal aid service or a Debt Mate counsellor to help you.
This option applies if you are in arrears in your vehicle instalments and the credit provider wants to sue and obtains a court order, i.e. Warrant of Execution, for the repossession of the vehicle, a Summons must first be served upon you. A court date for appearance will then be set, which will be stated in the Summons, whereby you can go and present your case in court before the residing Magistrate.
This is why it’s important to make sure that your credit provider always has your latest physical address on record. For without it the Summons will still be served, most likely to an old address, but you won’t know about it; and subsequently you will also not know about the court date or be able to appeal your case in court.This means that a “default judgement” will be granted against you, because you didn’t appear in court which is automatically considered an admission of guilt, and in favour of the credit provider.
If you tried to negotiate with the credit provider for an adjusted repayment plan, the Magistrate might actually understand. There could be some sort of leniency in the matter whereby the Magistrate could possibly suggest a reduced monthly premium over a longer period, to accommodate both parties. Though, if there is no record of negotiations between both parties, the vehicle very may well be awarded to the creditor. Who will then sell the asset at any cost they deem reasonable to cover their expenses. This means that you may still end up paying the shortfall, if it was sold for less than your outstanding balance.
This is an alternative solution that could help you keep your vehicle, and is an option regardless if your instalments are in arrears or not. Upon application for this process, legal documents are sent to your credit providers to inform them that you have applied for Debt Review. At that very moment your vehicle is protected against repossession, provided that no Summons has been issued yet, so it is important that you act quickly once you realise you have a problem.
One of the benefits, of many, of Debt Mate’s debt review program, is that we negotiate reduced instalments on your accounts, including your vehicle finance. This means you get to keep your vehicle for a reduced monthly instalment without you having to plead with your creditor to assist you. While the debt review process provides you with many protections, you are still accountable to settle all of your debt all this process does, is to provide breathing space in overextended households and helps you to stay on track, with you critical assets intact.