FAQs

 
Q: What is Debt Counselling?
A:  Trained individuals (called Debt Counsellors) will help you to deal with your debt. They will deal with your creditors and come to an agreement that allows you to cover your living expenses and apportion the remainder of your available funds to your creditors. Debt cousellors will conduct independent enquiries into your financial circumstances and make recommendations to Credit Providers or even the courts concerning restructuring your debt or even suspending “reckless” credit agreements. You may not actually be “Over-Indebted” and qualify for “Debt Review”, in this case the Debt Counsellor will assist you to work out a budget which will enable you to repay your debts effectively.
Q: Who goes for Debt Counselling?
A:  Any consumer who has entered into a credit agreement and is declared over indebted by the debt counsellor can go for debt counselling. However certain credit agreements can be excluded from going under debt counselling if the credit provider has already proceeded with legal action. It is therefore very important that you act early when you are experiencing repayment problems so that all your credit agreements can be included under debt counselling.

If the credit provider has already taken legal steps then mediation might be the solution.

Q: What are the Pro's and Con's of Debt Counselling?

A:  Pro’s:

  • Once a consumer has made application for Debt review, Credit Providers can no longer attach any assests or take any further legal action against the consumer pending a determination by a Debt Counsellor as to whether the consumer is actually “Over-Indebted” or not. Should the consumer be “Over-Indebted” the consumer continues under Debt Review until all debt is settled.
  • There is no permanent record of being under Debt Review kept on any Consumer Credit Bureau Data Base, meaning that unlike Administration or other avenues, the process leaves no black mark against your name.
  • Repayment of your debt obligations is done through one payment (to a payment distribution agency).
  • The Debt Counsellor will set aside a certain amount of income for your necessities (food, school fees, transport costs etc) and you then use whatever money you have left over to pay your debts. You will never pay more money than you can reasonably afford.
  • A registered Debt Counsellor is far more likely to get a positive response from your creditors when it comes to negotiating your repayments than you might as a consumer.
  • While under “debt review”, you only make one monthly payment – to a payment distribution agency – who in turn pays all your creditors. This one easy payment will make your finances much easier to manage and reduce your banking fees.
  • A qualified Debt Counsellor will be able to advise you on ways to cut your monthly costs.
  • Relief from all the stress of being in debt. You will get good advice and know that you are doing something about the problem. Knowing that one day the debt will gone, as will any record of it puts your mind at ease. No more letters you are too scared to open. No more phone calls you are to0 nervous to answer. Dealing with the problem rather than ignoring it gives you an instant feeling of relief.

 

Con’s:

  • While under debt review a person can no longer get access to new credit.
  • While this may seem to be a negative thing, it is actually built into the process to protect consumers from becoming further indebted and to protect Credit Providers from being accused of “reckless lending”.
Q: What is Debt Counselling going to cost me?

A:  Different Debt Counsellors may charge in slightly different ways. However the legislated industry standard is: R50.00 upfront, a possible R300.00 rejection fee (which should cover creating a new budget for the consumer and advice). Further cost will be absorbed from your first rescheduled repayment, once all your creditors agree, amounting to either up to R6000 of the first repayment or R4000 if it is a “Joint Application”.

Q: How do I assess my Debt?

A:  If you suspect you, or someone in your family, is getting in too deep or if your income has reduced due to retrenchment, illness, death etc, there are some simple steps that can be taken to get back on the road to debt recovery.

  1. Assess your indebtedness: our friendly, easy to use and anonymous indebtedness assessment tool may be used to work out whether you need help to restructure your debts, udjust your budget or make arrangements with debt collectors. Alternatively you can speak to one of our friendly Helpline Agents who can help you assess your situation. By completing the Debt Assessment & Budgeting Tool or filling in our financial wellness forms, honestly and thoroughly, and by both partners in the home, will provide you with a detailed  assessment of your situation.
  2. Don’t leave it until it’s too late: once you have assessed your situation TAKE ACTION. It is possible that you are only on the brink of being over-indebted. Use our Debt Assessment & Budgeting Tool to bring your debts under control OR speak to one of our Helpline Agents who will will discuss various options with you. If you appear to be terminally over-indebted you need to ACT FAST.
  3. Admit you have a problem, tell someone you trust. If you have kept your debts secret from your partner or spouse, TELL THEM NOW. A problem shared is a problem halved.
  4. Don’t ignore the problem. It won’t go away. You are not alone and there is help at hand.
Q: What happens when I cannot pay?

A:  As soon as you know you can’t make your payments in full or at all, contact the bank, or the creditor whose account you have because if they don’t hear from you they will take legal action which will cost you and tarnish your credit record. Be honest and BE QUICK. If you find contacting your creditor intimidating or confusing our Helpline Agents are there to assist you through the process.  Ask for help. You could have lost your job, are sick, or have a family emergency. If you do a debt assessment with us and it clearly shows you are in trouble, work with us as soon as possible to work on a debt rehabilitation or payment plan. It may be that you only need a few months to get back on your feet and all you need is some breathing space. Our professional help will keep your creditors happy in the meantime if they know you have voluntarily gone for assistance.

Q: I’m listed and I want my name to be cleared?

A:  These different types of listing forward to the credit bureau by credit providers. In this case you need to contact Transunion on 0861 482 482 to send you your ITC report so you can be aware of which credit providers have listed you and for what reason.

Q: I need a consolidation loan?

A:  Unfortunately we don’t offer loan due to the course that we are a non-profit organization and we assist consumers who are experiencing financial distress. We mediate and negotiate for consumer to pay a reduced instalment on their accounts.

Q: I need help with a garnishee order?

A:  Can you please take me through your situation. You can rescind you administration order by asking your administrator to issue you with Section 74U Certificate for the administration to be rescinded but you need make arrangements with you credit providers to pay your outstanding debts. If you think that your administrator has been overcharging approach the Magistrate’s Court where your court order was granted. Ask them to get the administrator’s accounts taxed.

Q: I got a Section 129 letter – What Now?

A:  Before you default:

Speak to your credit provider and request that your repayments obligations be restructured. Most credit providers are willing to do this if you approach them early.

When in default:

At this point the credit provider can issue a letter in terms of Section 129 of the National Credit Act to a defaulting consumer under a credit agreement before the credit provider is able to approach a Court to enforce the credit agreement.

The purpose of the S129 Notice is to advise a consumer that he may refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the credit agreement up to date, before the expiry of a period of 10 business days from receiving the letter.

When you as the consumer receive a statement or letter stating that your account is in arrears/default, DO NOT WAIT for the S.129 Notice before you request assistance. Be pro-active and make necessary arrangements directly with your credit provider. If the negotiations with the credit provider fail CONTACT the ICS immediately for assistance.

If an account has been in default for at least 20 business days, and where 10 days have elapsed after the credit provider has drawn the default of an agreement to the attention of the Consumer by giving notice in writing and proposed that the consumer refer the agreement to an alternative dispute resolution agent, debt counsellor, ombud with jurisdiction or consumer court with the intent that the parties resolve any dispute and/or develop a plan to bring the payments under the agreement up to date (the S.129 Notice), a credit provider may approach the court for an order to enforce a credit agreement.

Where the consumer has not yet received a S.129 notice, that agreement may be included in the debt review process in terms of the law, but after the credit provider has issued a S.129 Notice, it is important to note that the Consumer must approach an alternative dispute resolution agent (ADR), ombud, debt counsellor or consumer court without delay with the intent to bring an account up to date or resolve any dispute and/or develop a plan to bring the payments under the agreement up to date.

Q: I need help with a garnishee order?

A:  Please take me through your garnish order situation.
We can assist you with investigating your garnish order, please get a copy of your garnishee order from your HR department and pay slip.

Garnish Order:

  • Latest Salary Advice
  • Breakdown of Monthly Expenses (very brief);
  • Identity document (for Credit Bureau reporting);
Q: I’m under administration and I want to withdraw from the process?

A:  Can you please take me through your situation. You can rescind you administration order by asking your administrator to issue you with Section 74U Certificate for the administration to be rescinded but you need make arrangements with you credit providers to pay your outstanding debts. If you think that your administrator has been overcharging approach the Magistrate’s Court where your court order was granted. Ask them to get the administrator’s accounts taxed.

Q: I got a Section 129 letter – What Now?

A:  Before you default:

Speak to your credit provider and request that your repayments obligations be restructured. Most credit providers are willing to do this if you approach them early.

When in default:

At this point the credit provider can issue a letter in terms of Section 129 of the National Credit Act to a defaulting consumer under a credit agreement before the credit provider is able to approach a Court to enforce the credit agreement.

The purpose of the S129 Notice is to advise a consumer that he may refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the credit agreement up to date, before the expiry of a period of 10 business days from receiving the letter.

When you as the consumer receive a statement or letter stating that your account is in arrears/default, DO NOT WAIT for the S.129 Notice before you request assistance. Be pro-active and make necessary arrangements directly with your credit provider. If the negotiations with the credit provider fail CONTACT the ICS immediately for assistance.

If an account has been in default for at least 20 business days, and where 10 days have elapsed after the credit provider has drawn the default of an agreement to the attention of the Consumer by giving notice in writing and proposed that the consumer refer the agreement to an alternative dispute resolution agent, debt counsellor, ombud with jurisdiction or consumer court with the intent that the parties resolve any dispute and/or develop a plan to bring the payments under the agreement up to date (the S.129 Notice), a credit provider may approach the court for an order to enforce a credit agreement.

Where the consumer has not yet received a S.129 notice, that agreement may be included in the debt review process in terms of the law, but after the credit provider has issued a S.129 Notice, it is important to note that the Consumer must approach an alternative dispute resolution agent (ADR), ombud, debt counsellor or consumer court without delay with the intent to bring an account up to date or resolve any dispute and/or develop a plan to bring the payments under the agreement up to date.

Q: My property is going on auction?

A:  The following questions get asked:

  • I you under debt review?
  • Did you receive summons?
  • How far I you in arrears?
  • What is the reason for non-payment?

After the entire questions have been answered, we can assist you in mediating with your credit provider to pending the legal action based on the merit of the case.

Q: My vehicle is being repossessed?

A:  The following questions get asked:

  • I you under debt review?
  • Did you receive summons?
  • How far I you in arrears?
  • What is the reason for non-payment?
  • Did you receive any court order?

After the entire questions have been answered, we can assist you in mediating with your credit provider to pending the legal action based on the merit of the case.

Q: Are you harassed by debt collectors?

A:  Rights and Obligations when approached by debt collectors

  • Ask the agent to identify themselves and take down their full details. Do not speak to them if they cannot identify themselves and their organisation.
  • If they are delivering a Section 129 notice, inform the agent that you would like to exercise your right to the 10 business days to consider your options. These include approaching a debt counsellor, ADR agent, Consumer Court or Ombud to work on a plan to bring your arrears up to date or resolve a dispute;
  • If they claim to have come to repossess your car don’t hand over the car unless they have a court order. Don’t sign a voluntary surrender document unless if you want to give them the car back. You are not obliged to sign a voluntary surrender.
  • If they are calling to collect debt that is more than three years old please ensure that the debt is not prescribed debt as it is now illegal to collect prescribed debt. Debt prescribes if three years has passed, you have not acknowledged or paid anything and the credit provider has not issued summons or taken judgment against you. Prescription does not apply to mortgages, TV licenses and other government debt.
  • Do not make any arrangement unless you know your income and expenses. By doing this exercise properly you will determine whether you are able to afford the new instalment;
  • If you make an arrangement to reschedule your repayments, make sure it is written and confirmed by the agent and accepted by your credit provider;
  • Do not sign any documents you do not understand. Ask them to leave you with the document. Once you sign a document you are deemed to have read, understood and accepted the contents of the document;
  • Contact the ICS Helpline to assist you. We can help you work out a proper plan to bring your arrears up to date or to resolve a dispute.