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Frequently Asked Questions
Can I apply for Debt Counselling if I am unemployed?
No. You have to have a stable income if you want to apply for Debt Counselling. If, however, you are married in community of property and your partner is permanently employed you will be able to apply for Debt Counselling as a joint application
Why should I apply for Debt Counselling?
Debt Counselling is part of the National Credit Act and was created with the intention of assisting over-indebted consumers to repay their debt by extending the original credit agreement and reducing the monthly instalments, to ensure that they can afford their reasonable living expenses and avoid legal action. If you cannot meet the expectations of your creditors every month then you are a potential candidate for Debt Counselling.
What is the difference between Debt Review, Sequestration and Debt Consolidation?
Debt Counselling or Debt Review is a debt management solution as it provides over-indebted consumers with a debt repayment plan. A debt counsellor deals with the customer’s creditors on their behalf in order to have their credit agreements extended and their instalments reduced. The debt repayments are consolidated into one affordable monthly repayment.
Administration is a debt solution whereby the consumer’s current debt instalments are reduced and they only pay their creditors once every three months. The debt repayment terms are often extended indefinitely, which means that the process is lengthy. There are also limitations as to the total amount of debt that is subject to a debt administration order.
Sequestration is where a consumer sells some (or all) of their current assets in order to pay off or lessen their current debt. The court will also appoint someone to manage the customer’s debt, which means that sequestration can be a lengthy and expensive process.
How much does Debt Counselling cost?
This depends on your unique financial situation. The fees charged by Debt Counsellors are regulated by the National Credit Regulator.
There are some negative rumours floating about about Debt Counselling. Does this process really work?
Debt Counselling has evolved a great deal since it was launched by the NCA in June 2007. Many people have benefited over the years from the process and we are happy to see that more and more people are realising that the system actually works.
In some isolated cases there were a few bad apples in the industry in the form of Debt Counsellors who did not have the consumers best interest at heart. The NCR quickly latched on and most of them have since been removed as Debt Counsellors.
It is important that you choose the correct Debt Counsellor who possess the necessary skills, competence and experience to offer you the full benefits that Debt Counselling can provide. Here at SMA Debt Counsellors you can be rest assured that we have all of this to offer and more.
What is a Debt Counsellor?
A debt counsellor is a person that is qualified by and registered with the National Credit Regulator. A debt counsellor assists consumers who are over indebted by developing an affordable repayment plan. A debt counsellor negotiates with the consumer’s creditors on their behalf to extend credit agreements and reduce their monthly instalments.
Can I get more credit if I am on Debt Review?
No, if you are placed under debt review, it will be indicated next to your name on the records of the credit bureaus. Once all of your debts have been settled, a clearance certificate will be issued and there will be no indication at the credit bureaus that you have been under debt review. You can then enter into credit agreements once more.
How long will I remain under debt review?
This will depend on your unique financial situation. Your debt counsellor might negotiate with your credit providers to extend your repayment periods in order to lower your monthly instalments. This means that it might take a bit longer for you to repay your debts than originally stipulated in the credit agreement.
Will Debt Counselling have a negative impact when I make a job application in the future?
No, it should not have a negative impact on your job application. Realistically, if a new employer does a credit check on you and discovers that you are under Debt Review, it can be viewed as doing the responsible thing for your future.