Debt Counselling or Debt Consolidation is a NCR Regulated program created through the National Credit Act that legally assists over-indebted consumers to become debt free whereby a Debt Counsellor will assess the consumers' financial circumstance and proceed to restructure debts through a payment plan (proposal) which will benefit both the consumer and credit provider, taking into consideration both essential living expenses and debt obligations of the consumer.
Yes, bonds and vehicles are eligible for inclusion under the Debt Counselling process and will be fully protected from any legal action if legal action through courts have not been initiated by the relevant creditor.
In terms of Section 88 of The National Credit Act all outstanding debt should be included under Debt Counselling in order to fully assist consumers to rehabilitate their current outstanding debt.
In order for the Debt Counsellor to rehabilitate the current outstanding debt, the consumer will not be able to incur further debt until all debt under the Debt Counselling process was settled in full whereas a Clearance Certificate will be issued which in turn clears the consumers’ credit profile, allowing the consumer to incur further debt should the need arise.
Yes, a Debt Counsellor should make provision for your expenses on your budget and will assist with a letter for rent reflecting the amount you will be able to contribute on a monthly basis.
As a protection measure, a flag referring to the debt review application will be placed on a consumers' credit profile/ record. This is by no means a blacklisting and will be removed upon issuance of a Clearance Certificate after the successful completion of the process.
It is the employer’s choice on what the exact requirements are for their employees, so we will not be able to say definitively.
However, historically we have seen that in general being under Debt Review is not an issue when looking for employment. The only industry that might have some question is if you are looking to be employed in the financial sector.
Theoretically, there shouldn’t be discrimination towards someone in Debt Counselling when it comes to employment opportunities.
If you completed your previous Debt Counselling successfully then it should be possible.
But it is very unlikely that your second Debt Counselling will be granted if you failed to pay your first Debt Counselling instalments. The main reason for this is that you will still need to pay your first Debt Counsellor’s outstanding fees. Plus, your creditor will most likely not agree to any new repayment plan since the last repayment plan was not followed.
Debt Counselling is a great option for South Africans in serious financial trouble, still, they will need to consider the pros and cons of the program.
The Pros:
Consolidate your debt without having to add an additional loan to your debt mass.
Monthly instalments could be reduced by up to 60%.
Financial relief with the above mentioned reduced instalments.
Your home and car stay safe – No repossession, no legal action from your creditors.
You will be able to afford your family’s crucial living expenses.
Once the program is successfully completed you will enjoy complete financial rehabilitation with a clear credit record.
The Cons:
You will not be allowed to get credit while in the program.
Your Debt Counselling will be listed on your credit record until the completion of the program or when all your debt listed under Debt Counselling are paid up in full.
The payment period of your debt will be extended in order to lower your monthly instalments.