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    FAQs - Debt Counselling?

    What is debt counselling?

    Debt counselling is a process of assisting consumers that are experiencing debt related problems through:-

    Budget advice;
    • Restructuring their payments;
    • Negotiating with credit providers on their behalf, and 
    • Monitoring their payments while
    • Providing after-care services

    Debt counselling is done by a debt counsellor. This is someone who is registered with the National Credit Regulator (NCR) and who assists consumers who are experiencing debt-related problems and are having difficulty making their current monthly payments by providing them with budget advice support and mediation with credit providers.

    How does it work?

    Debt counsellors can work independently or as part of an organisation. In terms of the Act, debt counsellors cannot be part of organisations that provide credit, debt collection agencies or credit bureaus. A consumer who is over-indebted may approach a debt counsellor directly, or he/she may be referred to a debt counsellor by his/her creditor/s or by the magistrate court. Consumers can call the NCR on 0860 627 627 to get a list of registered debt counsellors or log on register of registrants.

    How much does it cost?


    1. The Debt Counsellor may receive the following amounts in respect of consumers who have applied for debt counselling:
    2. An application fee, limited to the amount prescribed in terms of Schedule 2 (2) of the Act, recoverable directly from the consumer upon receiving an application for debt review;
    3. A rejection fee of R300.00 (excluding VAT) in respect of consumers whose applications have been rejected in terms of section 86(7)(a);
    4. A restructuring fee of the lesser of the first instalment of the debt re-arrangement plan or a maximum of R6000.00 (excluding VAT), in respect of a consumer whose applications have been accepted in terms of 86(7) (b) or 86(7) (c). (Should a joint application be required, the fee can be increased to a maximum of R6000.00 (excluding VAT).
      • 100% of the fee is payable at the first instalment.
    1. Should a Debt Counsellor fail to submit proposals to Credit Providers or refer the matter to a Tribunal or a Magistrate Court within 60 business days from date of the debt review application the Debt Counsellor has to refund 100% of the fee paid by the consumer (excluding the application fee).
    2. A monthly after-care fee of 5% (excluding VAT) of the monthly instalment of the debt re-arrangement plan up to a maximum of R400.00 (excluding Vat), for a period of 24 months, thereafter reducing to 3% (excluding VAT) of the monthly instalment, to a maximum of R400.00 (excluding VAT), for the remaining period of the debt re-arrangement plan.

      • Payment of the monthly after-care fee is to commence in the 2nd month after the amount in 1.3.1 above has been paid.
    • Should the consumer withdraw from the process after completing stages 1.3 above, a fee equal to 75% of the restructuring fee as per 1.3 above is payable by the consumer.
    • A legal fee for a consent order of R750.00. The legal fee for the consent order may only be deducted in the 2nd month after the amount in 1.3.1 above has been paid. If the consumer’s affairs cannot be resolved through a consent order, and there are additional costs for further legal processes, these need to be separately negotiated with the client. The Debt Counsellor should be able to produce proforma invoices issued to them by their lawyers for legal services, when so requested by the NCR.
    • The applicable fees and related debt counselling services will be set out in an addendum to Form 16, which needs to be explained to the consumer and signed by him/her.


    Where do you find debt counsellors? 

    Consumers can log on to – register of registrants or alternatively call our call centre on 0860 627 627

    How do you know you need a debt counsellor?

    When you are suffering under the yoke of over-indebtedness, then you need a debt counsellor.
    A consumer is considered to be over-indebted if the money available after payment of essential expenses is not enough to pay all other debts.  Herewith some indicators of over-indebtedness:-
    A consumer is over-indebted when he/she cannot service all his/her debts in a timely manner as agreed in the credit agreements.  The following are indicators of over-indebtedness:-

    • You use your credit card and overdraft facilities to pay debts and buy food and other necessities;
    • You borrow money to pay other debts;
    • You skip payments on some accounts in order to pay others because you cannot keep up;
    • You cannot pay your bills at the end of the month;
    • You receive letters and summonses from creditors and/or lawyers;
    • You are considering being placed under administration;
    • You have judgments granted against you.

    How does one avoid becoming over-indebted?

    Avoid getting more debt, rather downgrade and change your lifestyle! It is important to remember that a change in lifestyle is the first step in creating a better environment for ourselves as consumers in these challenging times. You will need to cut some things and/or make adjustments in order to stay afloat. 
    Things you need to cut/adjust are:

    1. Alcohol
    2. Tobacco / cigarettes
    3. Entertainment
    4. Club membership
    5. Pay/Satellite TV
    6. Holiday clubs
    7. Gambling
    8. Where possible use public transport

    You will find that by cutting these items out of your budget, you have more cash. You then have the option to either save that money or pay more on your account and therefore reducing your monthly debts.


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