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Are you drowning in debt?
If your answer is “yes” to two or more of the questions below – Debt Smart will be able to help you.
Am I in debt?
Am I behind in my account repayments?
Am I too scared to answer my phone in fear of my creditors calling for money?
Do I need protection from legal action by my creditors?
17.6 million South Africans are indebted, of which 7.5 million have bad debt.
Debt counselling services were made available to over-indebted consumers from the 1st of June 2007 through the National Credit Act No. 34 of 2005.
Debt counseling aims to assist over-indebted people so that they can afford their monthly living expenses as well as pay their creditors.
Debt counselling will protect over indebted consumers from legal action, and protect thier homes and cars from being repossessed.
Debt Smart will investigate to determine whether the credit was granted recklessly.
Debtsmart Head Office is situated in Port Elizabeth, with franchise offices in East London, Ruimsig and Pretoria.
This does not mean though that we cannot assist you anywhere in South Africa!
We will Contact you.
SPEND MORE TIME WITH YOUR LOVED ONES
Let us deal with all your stress and let you get back to living your life.
Why Choose us to help you?
At Debt Smart we help you deal with your debt problems so that you and your family can live the life that you deserve!
By developing better debt management skills and changing your spending habits, not only can you get out of debt, but you can avoid finding yourself back in the same situation again.
We will restructure all your debts into one affordable monthly payment by placing you under debt review, and negotiating more affordable repayments with your creditors.
We can help you deal with the following types of personal debts:
Vehicle Finance
Personal Loan Accounts
Overdraft Accounts
Home Loans
Retail Store Accounts
Hire Purchase Accounts
Credit Cards
NB! Excludes the following
Service agreements such as water and lights, levies, etc as well as any accounts in which Judgment or Legal Action has already been instituted.
Let us handle your creditors and give you the freedom to experience life.
What is Debt Counselling
The sections of the National Credit Act No. 34 of 2005 relevant to over-
Debt Counselling makes provision to assist over-
Creditors are likely to take legal action when debtor’s accounts are in arrears, which can increase the financial burden by adding collection costs and penalty interest to any arrear amounts. Debt Counsellors protect the debtor from legal action by arranging a more affordable and acceptable repayment with each of the debtor’s creditors.
A consumer may approach a Debt Counsellor to carry out a confidential financial review of their financial affairs and officially determine whether or not they are over-
If it is found that the consumer is indeed over-
Debt Counselling provides consumers with the peace of mind knowing that their financial affairs are now handled by an NCR-
The Process
Reckless Lending
The Fees
The Process
The debt review process outlined in the National Credit Act comprises the following steps:
1. Consumer approaches a Debt Counsellor when they are unable to honour their monthly repayments on credit agreements in a timely manner.
2. Consumer completes an application form, pays a R57 application fee and provides the Debt Counsellor with a copy of their pay-
3. Debt Counsellor issues a notification to all creditors and credit bureaus within 5 business days.
4. Debt Counsellor conducts an assessment of the consumer’s over-
- comply with any reasonable requests by the Debt Counsellor to assist the evaluation of her state of indebtedness and the prospects for responsible debt rearrangement; and
- participate in good faith in the review. The Debt Counsellor must complete the assessment within 30 business days after receiving the consumer’s application for debt counseling.
5. If the consumer is not over-
6. If Consumer is over-
7. If this proposal is accepted, the Debt Counsellor must file it as a Consent Order with the Clerk of the Court.
8. If the consumer and/or any creditors reject the proposal, the matter is referred to the Magistrate’s Court.
9. The Debt Counsellor obtains a debit order for the consumer’s reduced monthly payments for a PDA to collect and distribute to the creditors.
It sounds straight forward but in practice DEBT REVIEW is a laborious process as all creditors have to reach an agreement or compromise by accepting lower repayments. It pays to stay in touch with your Debt Counsellor throughout the process and to keep paying your creditors as much as possible while a reduction in payments are being negotiated.
Reckless Lending
The National Credit Act requires that a credit provider must carry out a financial assessment to determine the extent or amount of credit that a credit applicant can afford before entering into a credit agreement with the applicant. In performing an affordability assessment, a credit provider must determine and take into account the following:
- whether the applicant has a general understanding and appreciation of the risks and costs of the proposed credit, and of the rights and obligations of a consumer under a credit agreement;
- the applicant’s debt repayment history;
- the applicant’s existing financial means, prospects and obligations; and
- whether the new credit agreement will cause the customer to become over-
indebted.
If a credit provider fails to do an affordability assessment before advancing credit to someone, the credit provider could be guilty of entering into a reckless credit agreement.
If an agreement is declared reckless it may be fully or partially unenforceable, and the credit provider may lose all or part of the money advanced. The Courts may set aside all or some of the consumer’s obligations to repay the debt under the reckless agreement.
The Fees
Debt Smart’s fees are set out in accordance with the guidelines provided by the Debt Counselling Association of South Africa.
1. Fees for an individual with gross income of more than R2 500.00 per month or household income of more than R3 500.00 per month:
- An Application Fee of R50 (excluding Vat) upon receiving an application for debt review.
- A Rejection Fee of R300.00 (excluding Vat) in respect of consumers whose applications have been rejected if found that the consumer is not over-
indebted. - A Restructuring Fee of R6000.00 (excluding Vat) for an individual application or R6000.00 (excluding Vat) for a joint application; or the lesser of the first installment of the restructured monthly payment.
The restructuring fee is payable at the first installment of the restructured monthly payment.
Should the 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% percent of the fee paid by the consumer.
2. A Monthly After-
3. Should the consumer withdraw from the process after completing the Restructuring phase, a fee equal to 75 percent of the restructuring fee is payable by the consumer.
4. Legal fees, if and when they occur, are recovered from the consumer provided the amount of such fees are disclosed up-
Sure you have questions, lets answer some of them now.
Frequently asked questions
and the answers.
To qualify for Debt Review you need to have an income and you must be over-indebted. If you don’t have an income, you will not have funds available for distribution to creditors. Your monthly income must be less than your monthly essential expenses and monthly debt repayments combined.
The Restructure Fee can be deducted from your funds available for distribution.
After submitting your application form, the Debt Counsellor will send the notifications to all your creditors informing them that you have applied for Debt Review. You are immediately protected from your creditors taking legal action or harassing you for payment arrangements.
No, you cannot apply for Debt Review if you are unemployed. However, should you have the prospect of employment in the near future, you may apply.
Yes. You continue to making payments, as per the recalculated amounts provided by our Debt Counsellors until a Consent Order has been signed by all creditors.
No, you must stop using all credit facilities immediately. You may also not apply for any new credit agreements while under Debt Review.
A letter of demand usually informs you, according to Section 129 of the National Credit Act, that you have 10 days pay your arrears or to see a Debt Counsellor, to prevent legal action from being taken.
The Debt Counsellor will negotiate a new proposal, if necessary, refer the matter to the Magistrate’s Court for a decision.
Debt Counsellor’s were formally introduced by the National Credit Act to help consumers who are having trouble with their debts. Debt Smart will negotiate with your credit providers on your behalf and design a manageable debt repayment plan that you can afford, so that you can take control of your finances and your future.
Yes, all credit bureaus will be notified that you have applied and will be updated frequently on your status in the process.
We will include home loans, vehicle finance, credit cards, overdrafts, store cards, personal loans and micro-loans. We will then look at your monthly income and expenses and make a recommendation on the amount you can afford to pay each month.
Yes. If you are married in community of property you are one estate and therefore both of you have to apply as a joint application.
If you miss a monthly repayment the credit providers will terminate the Debt Review and start legal proceedings which will include judgments and garnishee orders. If you are struggling to make your monthly repayment contact Debt Smart immediately so we can advise the credit providers of you situation and arrangements with them.
Advise them that you have applied for Debt Review, provide them with your reference number and tell them to contact Debt Smart.
Never make any promises or negotiate with a credit provider directly. Tell them to contact Debt Smart.