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Debt Counselling Clinic FAQS

If i "cancel" my administration order will i still have to repay my outstanding debts?

 

If i "cancel" my administration order will i still have to repay my outstanding debts?      

Yes - Even if you go for debt review you have to repay your debt and interest as agreed to the creditors

 

What are my rights as a consumer?

 

What are my rights as a consumer?      

• Right to confidentiality
• Right to protection against discrimination.
• Right to reasons why credit being refused.
• Right to plain, understandable language.
• Right to receive documents.
• Right to apply for debt review and rearrangement of obligations.
• Right of cooling - off.
• Right to statements of account.

 

If i "cancel" my administration order can creditors take judgment or other legal action against me?

 

If i "cancel" my administration order can creditors take judgment or other legal action against me?      
Yes - The protection of the administration order will fall away and you will have to pay your creditors yourself to avoid legal action to be taken against you. Remember that the national credit act and thus debt review does not apply to creditors who have already taken judgement.

 

Does this act cancel my administration order?

 

Does this act cancel my administration order?      
No - an administration order is a court order and can only be cancelled by the court on good cause. Good cause will be for example, that you can afford to pay all your monthly obligations (debts) due to a salary increase or promotion.

 

How much will i pay my debt counselor?

 

How much will i pay my debt counselor?      

Debt counsellors’ fees will vary, however all fees are regulated by the national credit act regulations. Ask your debt counsellor exactly what his/her charges are before you sign any documentation and ask for a copy of charges as explained to you.

 

Can i borrow money from my debt counselor?

 

Can i borrow money from my debt counselor?      

No!! Your debt counsellor may not borrow you any money.  It is prohibited in terms of the act.  If your debt counsellor does borrow you money he/she could face de-registration.

 

How would i ensure that my debt counselor is registered?

 

How would i ensure that my debt counselor is registered?      

1. A registered debt counsellor must reflect his/her registration status and registration number.
2. This information can be verified on the national credit regulator website www.ncr.org.za

 

Will i be listed at the credit bureau if i am under "debt review?

 

Will i be listed at the credit bureau if i am under "debt review?      
Yes -  But your name will be cleared as soon as all the debt under review is settled in full and the debt counsellor issues you with a clearance certificate.

 

Will interest stop when i am under debt review?

 

Will interest stop when i am under debt review?      
No - interest and costs can still be added to your accounts by the creditors, unless they agree otherwise.

 

What kind of debts can be under review?

 

What kind of debts can be under review?      
All credit agreements can be placed under debt review, with the following exceptions:
1. Contracts such as stokvels, insurance policies, leases, immovable property and dishonoured cheques.
2. Where a credit provider has already proceeded with legal enforcements on grounds of default such as judgments, emolument attachment orders, etc.

 

How long will i be under "debt counselling"?

 

How long will i be under "debt counselling"?      
This will depend on the arrangements as rearranged with the Creditors. A higher outstanding debt repaid at a lower monthly repayment will take longer to satisfy all obligations.

 

How does debt counselling work?

 

How does debt counselling work?      

If a person cannot pay all his/her instalments timeously and still have enough money left over to pay for necessary living expenses, then he/she is most probably over- indebted.Such a Consumer may apply to a Debt Counsellor to be declared over- indebted.


The Debt Counsellor will notify all Credit Providers and Credit Bureau of the application and then evaluate the Consumer’s indebtedness.
If the Debt Counsellor determines that the Consumer is over-indebted, the Counsellor may recommend to the Magistrate's Court that one or more agreements be declared reckless and/or that the Consumers repayments be rearranged. This is done by extending the original contract and decreasing the monthly payments. If the Creditors all agree, this procedure can be voluntary and no court order is necessary.


A Creditor who receives a notice from a Debt Counsellor for debt review MAY NOT ENFORCE the agreement until a determination is made by the Court or Debt Counsellor.


Once under debt counselling, a Consumer may not make any further debt. This is either until all debts have been paid in full and the Debt Counsellor has issued a clearance certificate or the Court decided that the Consumer is NOT OVER-INDEBTED.

 

How will this act protect me as consumer?

 

How will this act protect me as consumer?
 
   

1. The Act regulates the way credit is granted, and protects Consumers from reckless lending and over-indebtedness. (A Creditor may not grant you any credit if you cannot afford more credit. A Creditor must do an investigation at the credit bureau before granting any credit to you.)
2. If you are over-indebted the Act provides a new debt relieve measure called "Debt Counselling".
3. The Act also prescribes fixed interest rates and fees on credit.

 

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