What is Debt Review?

Debt Review is a process that was introduced by the National Credit Act 34 of 2005 (NCA) that provides over-indebted consumers relief by allowing their accounts to be restructured into one affordable monthly payment.

Debt Review is also known as Debt Counselling since a consumer that have too much debt must see a Debt Counsellor that was registered by the National Credit Regulator (NCR) to restructure all of his/her accounts into one affordable monthly payment.

When a consumer applies with a Debt Counsellor for Debt Review, the Debt Counsellor will then assess whether the consumer is truly over-indebted. If the consumer is over-indebted, the Debt Counsellor will then work out a new monthly budget for the consumer that makes provision for the consumer's necessary living expenses. The Debt Counsellor will also work out a new repayment plan that reduces installments on all of the consumer's accounts by increasing the repayment term and proposing reduced interest rates.

The budget and repayment plan is then sent to the consumer's credit providers in the form of a proposal. The Debt Counsellor will then negotiate with the credit providers and inform the consumer of the progress. When the proposal is accepted, a court order is drafted and referred to the Magistrates Court to request the court to grant a court order incorporating the repayment plan.

The consumer is legally protected from the day he/ she applied for Debt Review until the court order is granted. When the court order is granted the consumer is protected until all of his debts are paid up, given that the consumer doesn't skip any payments since the start of the process.

Since Debt Review is a legal process it is extremely important that the consumer contact a Debt Counsellor with a good track record, that will provide a professional and highly confidential service. We at Help 4 Debt believe that we are exactly the right choice for you!

Why should I use a Debt Counsellor?
If you struggle to make monthly payments on your accounts, you have several options:
  • Apply for more credit in order to pay off current debt
  • Borrow money from family or friends
  • Pay some accounts and while making arrangements on other accounts
  • Deal with the debt. Apply for Debt Review.

When you decide to apply for Debt Review, you need contact a Debt Counsellor that is registered with the National Credit Regulator (NCR). The National Credit Act (NCA) specifically provides for Debt Counsellors in order to regulate the process and to ensure that consumers get proper and professional debt relief.

It is important to ensure that you apply with a NCR Registered Debt Counsellor that not only provides a professional service but continues to provide such a service until your Debt Review comes to an end.

Help 4 Debt provides it's clients:
  • a Professional and Confidential service
  • Excellent and continued support
  • Knowledgeable NCR Registered Debt Counsellor
  • Professional Legal service by our Attorneys.
Which accounts are included in a debt review?
The National Credit Act specifically requires that all of your credit agreements are included in the debt review process. These credit agreements include long term and short term credit agreements and include the following accounts:
  • Bond (Home Loan)
  • Vehicle Finance
  • Credit and Clothing Card accounts
  • Personal Loans
  • Overdraft Accounts.

The other reason for this requirement is due to the fact that you can't add any accounts to the Debt Review later because a court order is granted.

Will my interest rates be reduced?

It is very important to understand that neither the National Credit Act (NCA) nor the courts are allowed to reduce interest rates on credit agreements.

We do however propose reduced interest rates of up to 1% in our repayment plan. Credit Providers recently started accepting reduced interest rates when Debt Counsellors propose it. Remember that a credit providers do this in order to help the over-indebted consumer but don't have to do so.

Will I have enough money for my living expenses?

A Debt Counsellor will always make provision for a consumer's necessary living expenses. it will not include luxuries. We believe in responsible Debt Counselling and the consumer and the Debt Counsellor must ensure that the consumer is not caught in a Debt Review that doesn't end in a reasonable time.

These are some of the living expenses we make provision for:
  • Groceries
  • Water & Electricity
  • Rent (If you do not own a property)
  • Transport or Fuel
  • Insurance Policies
  • School or Educational Fees
  • Any accounts excluded from Debt Review.

It is important to include all your living expenses when you apply for Debt Review to enable us to provide for all your necessary living expenses.

What happens if I skip a payment?

The main objective of a Debt Review is to ensure the protection of the consumer. This protection as envisioned by the National Credit Act (NCA) is conditional. As long as the consumer makes monthly payments according to the repayment plan and the court order when it is granted, the consumer it protected.

When the consumer skips a monthly payment, the credit providers can then terminate the debt review and start with legal proceedings against the consumer. The credit providers can also obtain a garnishee order against the consumer's salary amongst other legal remedies.

If I apply when will my debt review end?

We believe in responsible Debt Counselling and therefore we need to prepare a repayment plan with reasonable repayment terms. Bond or Home Loan accounts can be restructured between 20 to 30 years. The rest of the credit agreements can be restructured up to 60 months. This means that a consumer will be under Debt review for at least 60 months unless the consumer pays extra money to reduce the duration of the Debt Review.

We also need to review the repayment plan on an annual basis to see if the consumer's financial situation changed to such a degree that the consumer can pay more towards the Debt Review. Should this be possible this will of course reduce the duration Debt Review.

There are two ways to end the debt review:
  • All your accounts are paid up
  • All of your short term debts are paid up and only the home loan account remains and the homeloan account is up to date.
In these cases a clearance certificate can be issued. It is important to remember that in the case where there is a homeloan account and the account is up to date, it will be necessary to apply for a rescission of the court order. Our attorneys will be able to do this for you. There is a cost involved for applying for the rescission. This is required in almost all instances by the credit provider involved.
Can I exclude some of my accounts e.g. my homeloan?
The National Credit Act specifically requires that all of your credit agreements are included in the debt review process. These credit agreements include long term and short term credit agreements and include the following accounts:
  • Bond (Home Loan)
  • Vehicle Finance
  • Credit and Clothing Card accounts
  • Personal Loans
  • Overdraft Accounts.

The other reason for this requirement is due to the fact that you can't add any accounts to the Debt Review later because a court order is granted.

Will I still get calls or letters from my creditors?

The Debt Review process takes 60 working days until you receive a court date. We inform all your credit providers that you applied for Debt Review within 5 working days of your application. Of course we need a properly completed application form and all the required documents.

The credit providers then have 5 working days to provide us with the oustanding balances from their system. This is called a Certificate of Balance (COB). The account is then also transferred from the credit providers branch to the Debt Review Department of the credit provider. As soon as this is done most calls will be directed to the Debt Counsellor.

If you have applied for Debt Review and receive any letters, calls or SMS's, we request that you inform us immediately and forward such communication to us. We will then follow it up and ensure that credit providers are updated with the status of your Debt Review.

Can I apply for Debt Review if I am unemployed?
Unfortunately, the nature of Debt Review demands monthly payments being made on your accounts. If you are unemployed you will not be able to make such payments and therefore cannot apply. If however you are married in community of property and your partner earns a salary that will ensure that you will have enough for your living expenses and reasonable repayments on your accounts, then you can still apply.
I am married in community of property. Can I apply on my own?
If you are married in community of property, both you and your partner must apply. This is due to the fact that when one is married in community of property it is a joint estate.
Will I still be able to rent a property if I apply?
Since we make provision for rent in the living expenses of a consumer that applies for Debt Review, there shouldn't be a problem. Should a problem arise, the consumer can always direct the landlord or agent to his/her Debt Counsellor for confirmation that provision was made for the rental amount.
Will debt review affect my employment opportunities?
During the early implementation of the National Credit Act, some consumers did report that it was a problem for certain employers. Most of these theething problems now seem to be behind us and doesn't seem to be a problem anymore. Different employers of course always have a range of criteria for different placements as part of their internal requirements.
Someone told me they heard bad things about debt review, why should I trust you?

It is true that some consumers did experience problems with Debt Counselling especially in the beginning. To be reasonable it is important to realize that these problems can be blamed on any of the parties involved in the Debt Review process. It is very important that the consumers ensure that the Debt Counsellor they decide to use will be reliable and knowledgeable

At Help 4 Debt we strive to provide our clients with the best service. Our Debt Counsellor was registered with the National Credit Regulator in 2008 and since that time Help 4 Debt Debt Counselling provided a reliable, professional and confidential service to our clients.

Why am I listed with the Credit Bureaus?

The National Credit Act (NCA) requires a consumer that applies for Debt Review to be listed with all the Credit Bureaus. Credit Bureaus are also regulated by the NCA. The first reason is to ensure that credit providers are aware of the Debt Review to ensure that they do not extend further credit to the consumer. If credit providers extend credit to a consumer that cannot afford it, a case can be made that Reckless Credit was provided to the consumer. This is a safeguard for credit providers.

The second reason is to prevent further credit to be extended to an over-indebted consumer. It is important that the consumer that applied for Debt Review pays all of his/her debt to reach the goal of financial freedom. When the debt review comes to an end the consumer will receive a Clearance Certificate and the listing will be removed. The consumer will then be able to obtain credit again if he/she can afford it.

Why should I pay a Debt Counsellor?
The Fees that a Debt Counsellor receives are determined by the National Credit Regulator (NCR). Fees are payable to a Debt Counsellor to ensure that the consumer receives a professional and continued service. There is a lot of administration involved for a Debt Counsellor and therefore the service is not free. The Debt Counsellor the consumer chooses must do the following:
  • Ensure the consumer provides all information required
  • Inform all credit providers
  • Prepare a repayment plan for the consumer
  • Negotiate with credit providers
  • Ensure a court order is obtained
  • Ensured continued payments
  • Regularly confirm payments and balances
  • Issue a Clearance Certificate at the end.
Help 4 Debt is confident that we will provide you with the best Debt Review experience.
If your fees are paid in the first 2 months, can my creditors end the debt review?

The National Credit Act (NCA) provides for 60 working days in which the Debt Review should be finalized and a court date should be obtained. The consumer is completely protected during this time. Most of the time an over-indebted consumers don't have money upftront to pay the Debt Counsellor's fees or the legal costs for the court application.

The NCA makes provision for the payment of the DC Fee and the Legal Fee to be paid during the 60 working days. Credit providers are aware of this and know that they will only receive their first payment in the third month.

What happens if my legal fee is not fully paid in the 2nd month?
We provide you with one reduced monthly payment amount to pay towards your debt. Should this amount not be enough to pay for our Attorney's legal fees to draft the court documents and obtain the court order, we will determine a small monthly amount to allow the consumer to pay off the outstanding balance. Our attorneys accepted a zero percent interest repayment amount in order to help our clients.
Why do I have to pay a monthly DC After Care Fee and PDA Fee?
The Debt Counsellor After Care Fee and the Payment Distribution Agent (PDA) Fees are determined by the National Credit Regulator (NCR). It is important that the Debt Counsellor provides continued support to the consumer throughout the Debt Review. A Debt Counsellor must deal with any queries from the consumer, credit providers and the PDA on a continued basis for the duration of the Debt Review. The Debt Counsellor must ensure the following:
  • Payments are properly allocated
  • Outstanding balances are obtained regularly
  • Paid up letters are provided when an account is paid up
  • Any queries are properly dealt with.
The DC After Care fee provides for these additional services.

The National Credit Act (NCA) determines that the Debt Counsellor must appoint a NCR Registered PDA to deduct the money payment from the consumer's bank account and distribute the money to all of the consumer's credit providers. The PDA then needs to provide the consumer with a statement showing how the money was distributed. Help 4 Debt uses Hyphen PDA as they have proved to by highly efficient and we have a solid relationship with them. The PDA fee cover the bank cost for the PDA to make payments on behalf of the consumer.

If the PDA pays my accounts on my behalf, how do I know my accounts were paid?

Help 4 Debt use Hyphen PDA as it's Payment Distribution Agent. Hyphen PDA will provide the consumer with a monthly statement showing how the money was distributed. If the consumer encounter any problems they must immediately inform us that we can determine the cause and correct any problems encountered.

In which areas do you provide your debt counselling service?
Help 4 Debt is situated in Pretoria East and provides Debt Counselling in the following areas:
  • Gauteng
  • Brits
  • Delmas.
I am not in one of the areas you provide your services in, can I still apply?
Help 4 Debt is situated in Pretoria East and provides Debt Counselling in the following areas:
  • Gauteng
  • Brits
  • Delmas.

You are always welcome to give us a call and we will try our best to assist you.