Debt review FAQ

Debt-Counselling-Services F.A.Q. Debt Counselling | Frequently Asked Questions Is this like a loan? No, this is a full process in which your current debts are re-structured in such a way that you can afford to pay it back within your financial means. Will I be listed on the Credit Bureau by Help with Debt? Yes, once you have completed your application and paid your initial R50 application fee, you will be listed onto the system. This also means that all your credit providers will be notified that you are undergoing the debt review process and that they may not lay a claim to your assets. What do you mean by the payment pro rata basis? The pro rata basis means that the creditor that you make the largest monthly instalment to, receives the larger portion of your monthly payment. Can I become part of the debt counselling process if I already have judgement against me? Yes, But Please ensure we know your complete situation when you contact us. Does it make difference if I own my home or not? No, it makes no difference. Will the re-calculated payment plan by Help with Debt cover all my debt? Yes, we will deal with all your unsecured and secured loans. When we look at your finances, we will make appropriate allowance for you to be able to afford your day-to-day expenses before we calculate how much you can afford to pay your creditors. How long does it take for my situation to improve? Immediately? Yes! You will immediately benefit from a realistic budget which will allow your creditors to be paid at a rate which is affordable to you. Will I have to attend an interview? No. We treat all our clients with trust and respect. No one from our office will visit you at your work and we will only contact you when it is necessary. Will my employer and work colleagues find out taht I am under debt counselling? No, we never contact clients at work unless asked to do so. Your affairs will be dealt with in the strictest confidence. Can I still use my credit and store account cards? Once we enter into negotiations on your behalf all credit and store cards will have to be destroyed and returned to the companies concerned, this shows your commitment that you are serious about sorting out your debt and freeing yourself of this burden. Can creditors refuse to accept lower payments under the debt counselling proposal? Creditors do not have to accept any offers of repayment below the contracted minimum. However, it is our experience that they are prepared to accept reduced payment offers where we are able to demonstrate that the offer is reasonable and that you are committed to repay your debt through the debt counselling process. Will I still receive a default notices? By lowering your monthly payments to your creditors, you will be in default of your original agreements with your creditors and as a result may be issued a default notice. Creditors send out Default Notices in order to protect their legal position. Will creditors continue pursuing and harassing me for payments? Your creditors are obliged, according to the National Credit Act, to stop pursuing you when you've been placed under the debt review process. Let them know that we are your debt counsellors and that we will be acting on your behalf. You should forward any letters and queries to us to deal with it on your behalf. When can I start on the Debt Counselling plan by Help with Debt? You may join the plan immediately subject to completing our forms and make an appointment to see one of your friendly and professional advisors. How long will I have to remain under Debt Counselling? You will not have to sign any lengthy contracts and will be free to terminate our services at any point. However, your status with the credit bureaus will state that you are still under debt review until all your debt has been cleared and/or paid up to date I've been summoned to court, does debt counselling cover this? No, however it is our experience that attorneys and creditors will respond favourably to the debt review programme and agree to have this included in the debt review process. Can a debt counsellor help me if I had loans or credit agreements prior to 1 June 2007? Yes! It is your financial situation TODAY that is taken into account. Once I've cleared all my debt will you remove my name from the credit bureau? YES we will. More Frequently Asked Questions WHAT IS THE NATIONAL CREDIT ACT? It promotes and advances social and economic welfare, promotes fair and accessible credit market and protects consumers. WHAT ARE MY RIGHTS AS A CONSUMER? • right to confidentiality • right to protection against discrimination • right to reasons why credit has been refused • right to plain, understandable language • right to receive documents • right to apply for debt review and rearrangement of obligations • right to cooling-off • right to statements of accounts HOW DOES THE ACT PROTECT ME AS A CONSUMERS? • The Act regulates the way credit will be granted, and protect consumers from reckless credit granting and over-indebtedness. A creditor may not grant you any credit if you cannot afford more credit. A creditor must do an investigation at the credit bureau before granting any credit to you. • If you are over-indebted the Act provides a new debt relief measure called ‘debt counselling’. • The Act prescribes fixed interest rates and fees on credit. HOW DOES DEBT COUNSELLING WORK? • If a person cannot pay all his/her instalments timeously and has enough money left over to pay for necessary living expenses, he/she is most probably over-indebted. • Such a consumer can be referred by the Court or may apply to a debt counsellor to be declared over-indebted. • The debt counsellor must notify all credit providers and credit bureaus of the application then evaluate the consumers indebtedness. • If the debt counsellor determines that the consumer is over-indebted, the counsellor may recommend to the Magistrate’s Court that one or more agreements be declare reckless and/or that the consumers repayments be rearranged by extending the contract and make the payments smaller. If the creditors all agree, this procedure can be voluntary and no court order is necessary. • A creditor who receives notice of court proceedings for over-indebtedness or notice from a debt counsellor of debt review, MAY NOT ENFORCE the agreement until a determination by the court or debt counsellor has been made. • A consumer may not make any further debts until all debts have been paid in full in terms of the rearrangement or the debt counsellor or Court decided that the consumer is not over-indebted. WHAT KIND OF DEBT CAN BE PLACED UNDER REVIEW? Nearly every credit agreement, BUT • contracts such as stokvel, insurance policies, leases, immovable property, dishonoured cheques AND • where a credit provider has already proceeded with enforcement on ground of default (e.g. judgements, emolument attachment order, etc.) WILL INTEREST STOP WHEN I AM UNDER DEBT REVIEW? NO!! Interest and costs can still be added on your accounts by creditors, unless they agree otherwise. WILL I BE LISTED AT THE CREDIT BUREAU IF I AM UNDER ‘DEBT REVIEW’? YES!!! But your name will be cleared as soon as all the debt under review is settled in full and the debt counsellor issues you a clearance certificate. HOW LONG WILL I BE UNDER DEBT COUNSELLING FOR? It will all depend on the repayment amount as rearranged with creditors. The higher your outstanding debt and the lower your repayment monthly – the longer it will take to satisfy all obligations. if your payment monthly to the creditors is less than the monthly interest, you be under debt review for a very long period. HOW WOULD I BE CERTAIN MY DEBT COUNSELLOR IS REGISTERED? • a registered debt counsellor must display the certificate in their premises where they provide their debt counselling services from • it must reflect the registered status and number • the information can also be verified on the NCR website – www.ncr.org.za CAN I BORROW MONEY FROM MY DEBT COUNSELLOR? • NO!! Your debt counsellor may not borrow you any money. It is prohibited in terms of the Act. If your debt counsellor does lend money to you, he/she can be deregistered. WILL I ONLY PAY R50,00 TO MY DEBT COUNSELLOR? • NO!! The Act provides that the debt counsellor may require you to pay R50 BEFORE accepting your application for debt review, other fees or costs are not yet prescribed and must be agreed between you and your debt counsellor. NB!! ASK YOUR DEBT COUNSELLOR EXACTLY what his/her charges are BEFORE you sign any documentation and ask for a copy of charges as explained to you. DO I HAVE TO MAKE PAYMENTS TO MY CREDITORS WHEN I REGISTER FOR DEBT REVIEW AND THE DEBT COUNSELLOR IS STILL IN THE PROCESS OF NEGOTIATION WITH CREDITORS AND NO ORDER WAS MADE? • ‘YES’ because of the fact that your registration for debt review does not stop interest it be in your best interest to make payments as far as possible, even if it is not the whole instalment. • ‘NO’ the Act does not prescribe or require you to make payments during the first 60 day’s after your credit provider received notice by the debt counsellor or Court of the application for debt review. BUT penalty interest will be added to your account. DO I FIRST HAVE TO NEGOTIATE WITH MY CREDITORS BEFORE I GO TO A DEBT COUNSELLOR? NO!! You may negotiate with your creditors yourself BUT you cannot be forced to negotiate with them. You have got the right to go to a registered debt counsellor to assist you. WILL THE ‘HIRE PURCHASE’ CREDIT PROVIDER SUCH AS A FURNITURE STORE REPOSSESS THE GOODS IF THE GET NOTICE OF THE DEBT REVIEW FROM MY DEBT COUNSELLOR? NO!! As soon as a credit provider receives notice from the debt counsellor ‘debt freezing’ starts, thus they are prohibited to take legal Action until a determination was made by the debt counsellor or Court, UNLESS, they had already taking legal action before you registered for debt review. IF I GET A SALARY INCREASE OR MY FINANCIAL CIRCUMSTANCES CHANGE FOR THE BETTER, MY I PAY HIGHER INSTALMENTS TO MY CREDITORS AS NEGOTIATED ORDERED BY COURT IN THE DEBT REVIEW? YES!! The higher payments you make the sooner you will finish your debts and get your clearance certificate from the debt counsellor and the sooner your certificate, the sooner your record will be expunged from the credit bureau. WHY MUST I OPEN A SAVINGS ACCOUNT WHEN I GO UNDER DEBT REVIEW? Sometimes Credit Cards or Cheque Accounts are frozen by Banks, or money grabs done on salaries for arrear accounts. WHAT HAPPENS TO MY DEBT ORDERS GOING OFF OF MY ACCOUNT? You need to stop all debt orders going off your account in writing at the bank as well as with the companies that you have them with. You need to arrange new debit orders to be deducted from the new account. (i.e. for insurances, medical aid, etc. – NOT FOR DEBT) Debt-Counselling-Services If you have any questions we have not answered here then Kindly Contact Us and we will assist and answer where possible. http://www.helpwithdebt.co.za