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Frequently Asked Questions
General Questions
Debt Counselling is a formal legal process that provides for a consumer to be declared over indebted and for the Debt Counsellor to negotiate a restructured payment plan and obtain a court order confirming the new repayment plan. The Debt Counsellor must be registered with the National Credit Regulator and have an NCRDC number. The ICS uses the services of a registered debt counsellor. Once declared over indebted and accepted into debt counselling the following will happen:
- You will be protected from legal action for a period of 60 days from the day of application and after the arrangement has been concluded as long as you pay according to the new arrangement;
- All your creditors will have to stop calling you and liaise with your debt counsellor;
- You will be listed at the Credit Bureau as being under debt counselling;
For as long as you are under debt counselling you will not be allowed to get credit until you are issued with a Clearance Certificate once you have satisfied your obligations as per the Court or Tribunal order and in line with the National Credit Act.
When you are struggling financially and are unable to meet your monthly debt repayments, Debt Counselling is a way of providing you with relief in the form of reducing your monthly instalments as well as interest and fees. A Debt Counsellor has to be registered with the NCR and have an NCRDC number.
It is a process by which a mediator assists the parties in a legal dispute by:
- Facilitating discussions between the parties.
- Assisting them in identifying issues.
- Exploring areas of compromise.
- Generating options in an attempt to resolve the dispute.
- Mediation is an alternative to having the dispute resolved in court.
You approach the mediation clerk in the Civil Section at the Magistrate’s Court which has jurisdiction in respect of the dispute. The clerk will arrange for the parties to attend a meeting to assess whether their dispute can be submitted to a mediator. Mediation will be rendered at dedicated rooms identified as Therisano Centres.
About Credit Score
A credit report is a synopsis of a person’s credit history. It is a comprehensive report containing the following information; identity information, credit score, employment data, 24 months payment profile or history, credit account status, adverse information, deeds, directorship links, address information and contact information.
The credit report is used mainly to assess a person’s credit application as it contains your credit history. It details your history of paying loans and credit account status. It indicates a person’s financial habits by revealing how often you are making payments on time, outstanding credit balances and credit types you are using (home loans, motor vehicle finance loan, personal loan, payday loans, credit cards, store cards etc)
In South Africa there are about 3 major credit bureaus namely; Experian, TransUnion and XDS. The credit bureaus compile their own credit reports. It is for this reason the credit reports are likely to have slightly differences.
Apart from knowing your financial standing, regular monitoring of your credit report can also help you detect reporting errors and potential fraud attempts.
Credit providers use the credit scores and the credit report to decide whether to advance any credit to you. A good credit score means that you are not a risky borrower and the lenders will do business with you.
The risks of a poor credit score include; being charged high interest rates on credit cards and loans; credit loan applications may be declined and difficulty getting approved for a flat / house to rent.
Should one find errors on their credit report it is important to get hold of the credit provider first to confirm what is on the credit report with respect to that credit provider. If the information is credit bureau related then you can lodge a dispute with the credit bureaus.
It is well within your rights to dispute incomplete or inaccurate information on your credit report. According to Regulation No. R. 144 of the National Credit Regulator, credit bureaus must comply with the request to remove adverse consumer credit information and information relating to paid-up judgments. A consumer can and has a right to lodge a query or complaint with the credit bureaus.
Please find the list of credit bureaus to lodge a complaint on your profile.
Transunion – 0861 482 482
Experian- 0861 105 665
Compuscan now Experian – 011 799 3400
XDS – 011 645 9100
Should you need any assistance with checking your credit information. For a small fee we can pull your credit report and give you advise. Please feel free to send us a call back and we will call you back.
About Debt Relief
It is an assessment of your credit bureau report and household budget to assist you to manage your debt and resolve any problems you have regarding deductions relating to credit on your payslip or bank. Understanding your credit bureau report and credit health is very important to start the road to being a healthy credit active consumer that does not have excessive debts, has a clean credit record and free cash at the end of the month to save and invest. This credit health journey focuses on your needs with tailor made interventions to assist you to progress towards becoming financially fit, maintaining your Credit Health Fitness level and resolving any problematic issues picked up on your pay slip or credit bureau report.
Your credit bureau report which the ICS will get for your after you give approval;
Your pay slip to identify any problematic deductions;
3 month bank statement to identify how and on what you spend your money; and
Your household budget based on information you provide to us.
Answer these questions to determine if Debt Relief Plan or Court Mediation is for you:
Are you in arrears and been served with a section 129 notice, letter of demand or summons AND you have not gone under debt counselling?
Has your account been handed over to outside debt collection agents, including attorneys?
Is your car or house in the process of being repossessed or auctioned with or without a court order?
Do you have judgements or adverse listing that you want to settle and remove from your credit report?
If you answered yes to any of the questions above you might need Debt Relief Payment Assistance which can assist you to:
Organise an affordable, realistic and structured monthly budget and debt repayment plan if you are in arrears to facilitate the stopping of any legal action that might lead to the creditor obtaining a judgment against you. Once a creditor has obtained judgment this can lead to a car or house being repossessed or your salary being “Garnished”.
By agreement, prevent the creditor from executing a court order (where your car or house is in the process of being repossessed OR auctioned) or proceeding with legal action by negotiating an acceptable repayment plan.
Negotiate discounted settlements or reasonable repayment plan where you have a judgment or adverse listing and facilitate the updating of your credit bureau report.
Where you are in arrears, have received a section 129 notice, summons or been handed over and you have opted not to go under debt counselling, the ICS will arrange a debt relief plan for you. It is a negotiated repayment plan for each credit agreement that is meant to allow you to catch up or manage arrears:
It is a plan that allows you to meet your essential living expenses and manage your arrears according to your affordability.
It is a plan for when you cannot afford to make the full contractual monthly payments on your debts due to a change in circumstances like divorce, retrenchment, maternity leave, illness and other unexpected expenses or events.
It will not write off your debts but it will allow you to make negotiated reduced monthly payments.
The plan is not court ordered and can be cancelled by you when your situation changes but as long as you keep to your restructured payments credit providers will normally not take legal action.
You may still be contacted by your creditors if you use a third party like us to arrange a payment plan on your behalf. Do not agree to any arrangement without first consulting with us as it is important that any arrangement you make is within your prepared budget.
You will continue paying your creditors directly on the agreed method which could either be a debit order or cash.
A revised budget will be prepared for you and discussed to ensure that it is reasonable and sustainable.
The debt counsellor will, on your instruction and consent negotiate with credit providers or debt collectors on your behalf on those accounts that are in arrears and are in the process of being handed over to the legal process.
Once there is acceptance from your credit providers the new payment plan will be implemented and you will receive confirmation of the new arrangement in writing.
A revised budget will be prepared for you and discussed to ensure that it is reasonable and sustainable.
The debt counsellor will, on your instruction and consent negotiate with credit providers or debt collectors on your behalf on those accounts that are in arrears and are in the process of being handed over to the legal process.
Once there is acceptance from your credit providers the new payment plan will be implemented and you will receive confirmation of the new arrangement in writing.