Frequently Asked Questions
Here are a few questions and answers that will help you understand the purpose and results of debt counselling.
The Credit provider wil issue a section 129 letter so blocking Debt Counselling which will be followed by a Summons. The credit provider will take Judgment and then either garnish your salary (They take a portion of your salary before you get it), severely damage your credit credibility, claim and attach furniture, vehicle or assets and sell them on auction to recover funds.
DEBT COUNSELLING restructures installments to allow the consumer to pay his or her debt and meet his / her basic living expenses. ADMINISTRATION is only possible for debt less that R50 000.00, where installments are reduced, with creditors only receiving payments every three months. The term of repayment is much longer than under Debt Counselling. LIQUIDATION is a legal process where assets are sold. The Court will appoint somebody to manage your finances. This is costly, leaving you blacklisted for years or until the Court declares you rehabilitated.
No – You’re name is flagged which notifies credit providers that you are under Debt Counselling and that you are over-indebted.
No – Your name is flagged but NOT blacklisted and this is removed once you’re debt has been repaid.
Once the debt has been repaid, Gauteng Debt Counselling will issue a clearance certificate in accordance with the NCA (National Credit Act) and instruct the credit bureau to expunge the Debt Counselling notation from your record. This means that all records that you were under Debt Counselling is completely removed within 5 working days.
You have less than 20 days to see a Debt Counselor for help to stop them from taking legal action.
Yes, you can do an informal negotiation, however, you will not have the force of the NCR (National Credit Regulator) and the NCA (National Credit Act) supporting your negotiations and the credit provider knows this. They will proceed with legal actions behind the scene and once their legal process is in place, you will have lost the opportunity to use Debt Counselling to your advantage. Note that you will not have access to clearance certificates that clear your name once the debt has been repaid. Well trained Debt Counsellors have the ability and knowledge to restructure your repayments, submit proposals and negotiate with credit providers after which we will have the new agreement made legal by LAW in accordance with the NCA.
The Debt Counselor may receive the following amounts in respect of consumers with an individual gross income of more than R2 500.00 per month or household income of more than R3 500.00 per month: The only up front fee is the statutory application fee of R50.00. The Debt Counselors take their professional fee from your first repayment. This fee is the lesser of the first installment of the debt re-arrangement plan or up to R6000.00 (excluding Vat). Should a joint application be required the fee will remain less than R6000.00 (excluding Vat). A monthly aftercare fee of 5 percent of disbursement with maximum of R400.00 (excluding Vat) per month. These amounts will be taken into account in the proposed repayment plan. Legal fees must also be paid. This cost is defined up front and will be taken into account in the proposed repayment plan, so you will not have to find the cash for these costs.
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Our happy clients
Reason for applying to go under Debt counselling?
I was in a relationship where my partner participated in paying various debts and expenses. When this relationship ended, I was forced to move to Pretoria, rent accommodation and because of this, could not keep up with my monthly debt responsibilities.
How did Debt Counselling Help?
My budget was recalculated and a repayment plans was designed and proposed by Gauteng Debt Counselling to the various credit providers whom in turn accepted these proposals. This greatly reduced my monthly commitment enabling me to live once again without the stress of how and where to get the financial support needed.
Was Gauteng Debt Counselling professional and supportive?
Yes – They clearly and accurately explained the process of debt counselling and resolved all issues with regards to credit provider queries that arose after my initial application. I don’t receive any phone call from credit providers as the process is working and running smoothly.