National Credit Act (NCA). Act prescribing rules and regulations for the credit industry and sets the groundwork for over-indebtedness and debt counselling.
National Credit Regulator (NCR). The regulatory body responsible for monitoring the credit industry
Debt review also known as Debt counselling is a legal process introduced by the National Credit Regulator. It is a process set up to help South Africans who are struggling to pay off their debt.
The debt obligations are restructured, and interest rates are reduced to enable consumers to meet their monthly commitments.
A debt counsellor is an individual who is fully qualified and registered with the NCR. You can find a debt counsellor here. The debt counsellor regulates the process of assisting consumers manage their debts.
There are a few key indicators that you are struggling with your debt and need help. Ask yourself:
If your current debt exceeds your current income after all your living expenses have been paid you are likely to be overindebted
It is dependent on the outstanding debt amount but the maximum time the process lasts is 60 months.
Almost immediately. Within the first 5 days, we will have drafted a proposal to restructure your debts and have created a provisional repayment plan that you can afford. You will then start to make a single monthly payment to a Payment Distribution Agency, which will distribute the money to your various creditors according to your plan.
During the first 60 working days, your credit providers will not be allowed to implement action against you, and we will use this time to prepare your final repayment plan.
Providing we make a reasonable offer to your credit providers we will request the court to make the review an order of the court. Should your credit providers take action against you any payment that was due to them each month may in some instances be used to defend this action. Working with our experienced debt counsellors, it is unlikely the credit providers will not accept your repayment plan.
No, you do not have to go to court. Courts are used to dealing with debt review applications and rarely need the consumer to attend. The court order is there to protect you and stop the credit providers from hassling you.
We renegotiate the payment terms with your creditors, so you pay less over an extended period, and reduce the interest rate on your loans saving you money in the long term
One sizeable loan designed to pay your debts once off. So instead of paying several creditors, you are left with one creditor. Simply saying multiple debts are combined into a single debt but often at a higher interest rate
Debt review is the restructuring of all your debt repayments into one affordable monthly repayment by extending the terms of your credit agreements and decreasing interest rates, whereas consolidation entails taking out one large loan to settle all debts and only paying back one loan. Consolidation loans require that you are not over-indebted at the time of application.
Once the process has been completed and your debt has been repaid, your counsellor will issue you with a clearance certificate. The certificate is then submitted to the Credit Bureau so that they can update your record and remove any negative information they hold.
It is always best to pay something rather than nothing to keep the process going. If you are struggling to make your payments contact us immediately. We may be able to make a temporary solution with your credit providers or even claim creditor-linked insurance should you be retrenched.
No. This is to protect you from accumulating even more debt that you are unable to pay off.
Anyone who has a steady income and feels they may be over-indebted can apply for debt review. You qualify if after assessment your debt counsellor can confirm you are indeed overindebted
Debt counsellors’ fees are regulated by the National Credit Regulator (NCR) and form part of your monthly repayment amount so you will not be charged any additional or upfront fees. Generally, the 1st 2 monthly payments go to the debt counsellor for administering the debt review and legal process. Your creditors are then paid from month 3.
You may only withdraw from Debt Review prior to being found over-indebted (Form 17.2) or by obtaining a court order declaring you not over-indebted. You will not be entitled to receive a refund of the restructuring fee once the Debt Review process has started.
You may at any time change debt counsellors provided that all DC fees are paid up to date and we will facilitate this process. It is important to note that your new debt counsellor cannot restart the process and is not entitled to charge restructuring fees again.
All your payments are handled by an accredited Payment Distribution Agency (PDA) tasked with distributing payments to your credit providers.
We obtain a court order on your behalf which replaces all your credit agreements with the restructured amounts. This order protects you from any legal action from your credit providers as long as you are not in arrears.
If you are married COP or traditional marriage, you and your spouse are seen as one legal entity and will need to do a joint application for debt review. ANC/Islamic marriages are single applications but can also be joint applications, especially where there is a joint bond.
You can still apply for debt counselling to protect the rest of your accounts if you have already been summonsed. We will also negotiate with the summonsed accounts to arrange an affordable repayment amount.
A Section 129 letter is the start of the legal process to obtain a court judgement against you. You have 10 days from receipt of a Section 129 letter to remedy the default or apply for debt counselling. After 10 days from receipt of a Section 129 letter or a court judgement the account may not be included in Debt Review, but we can still negotiate an affordable repayment on your behalf.
A letter of demand precedes legal action and is an indication that you may be over-indebted and should possibly consider Debt Review.
A credit agreement is deemed to be reckless if the credit provider failed to conduct an affordability assessment and entering into that credit agreement would make the consumer over-indebted.
Your creditors should deal with us while you are on Debt Review. Should your creditors contact you, you can contact us and we’ll deal with them directly.
A detailed summary of your credit/financial history prepared by the Credit Bureau.
Meerkat is registered with the NCR (National Credit Regulator – NCRDC2613). We understand that life happens, and you can start to fall behind on your debt repayments. We can help you regain financial control and walk the journey with you to becoming debt-free. As a team, we’re looking out for you.
We also offer competitive credit life cover to protect you and your family if you die, are retrenched, become disabled or suffer a severe illness.
Do you know how much you are paying on your current loans for cover? We may be able to replace your existing cover where it makes sense to do so.
We will also kickstart an emergency savings fund as part of your debt management plan. This ensures you have funds available for when life happens. Don't delay, get started today!
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