Why is debt rehabilitation also called debt review?
It is a regulated and statutory (required) process followed by a registered debt counsellor to assist an over-indebted or debt stressed consumer through debt consolidation which reduces the monthly payments and extends the repayment period of debt stressed consumer’s credit agreements.
What is the purpose of debt rehabilitation/debt review?
To assist a debt stressed consumer by ensuring that debts are paid, assets not be repossessed, to stop creditors from harassing consumers, and to provide money for living expenses.
Why debt rehabilitation/debt review, and what is the alternative?
Debt review allows the consumer the opportunity to repay his/her debts and keep his/her assets. The alternative to debt review is debt mediation or sequestration.
What is debt consolidation?
It is the consolidation of debt into one affordable monthly payment to a payment distribution agency for distribution between creditors.
It differs from a consolidation agreement granted by one credit provider where all other creditors are paid off and only one loan remains.
How long does debt rehabilitation last?
The proposed period is 60 months for unsecured debts, 83 months for a vehicle, and 240 months for immovable property (depending on the age of the vehicle, and or owner of the property). The consumer may repay debts sooner if additional money becomes available.
Who can apply for debt rehabilitation?
Any natural person who is unable to satisfy on time all obligations under his/their credit agreements and who has an income (are employed).
Can a spouse apply together with their partner for debt rehabilitation?
It depends on the marital status of the parties involved.
COP (Community of Property) = joint application
ANC (Antenuptial Contract) = separate application however, should there be a joint bond debt, the option to apply jointly or separately is available.
Single, Divorced, Widowed = single application
Why it is necessary to check your ITC Report
An ITC report reflects consumer details and listings and must be check for correctness, to determine the status and payment of accounts, judgments, and adverse listings.
How will debt rehabilitation/review influence my credibility/job prospects?
You will not be able to apply for more debt. Employees may not discriminate against anyone.
Is the debt rehabilitation/review process regulated?
Yes. It is a statutory process and debt counsellors must be registered with the NCR.
The NCR is the Regulator of the credit industry.
What happens to my credit insurance and policies?
Credit insurance protects the consumer at the instance of death, sickness, or retrenchment (depending on the agreement).
The consumer must proceed to honor such payment whilst under debt review. Policies can be reviewed by a FAIS accredit broker for further advice and recommendations.
What happens if I default on payments?
One default affects all credit providers. It is not advisable to be in default of a proposal by the debt counsellor and especially not where there is a Court order (if granted) in place. The debt counsellor can arrange with the credit providers if an emergency occurs to facilitate a payment arrangement which will further be subjected to securing a favorable response from all creditors.
Can a consumer apply via a phone/video call?
Yes, if he/she applies to a registered debt counsellor and the debt counsellor can provide proof of the call that is to be further validated by the consumer’s signature on the application form (F16).
What happens after an assessment and proposal is made to credit providers?
The matter will proceed to the National Consumer Tribunal if all creditors accept the proposal or must proceed to the Magistrate’s Court to re-arrange the repayments to the creditors by granting an Order of Court.
Must I attend the court procedures?
No the debt counsellor or his legal representative will attend to the hearing, but a Magistrate has the discretion to require a consumer to attend for clarifying purposes.