There is no difference. Debt Counselling and Debt Review are different terminologies used to describe exactly the same debt management technique
Debt Counselling is a debt management technique introduced through the National Credit Act to help over-indebted consumers. It is a process where a registered Debt Counsellor formally and legally negotiates with a consumer’s creditors for the consumer to pay an amount that the consumer can afford to pay towards their debt obligations.
National Debt Helpline always strives to reach an agreement with creditors on reduced instalments, interest rates and extended terms. Through our experience and the good relationships we have built with creditors across south Africa, we often reach agreements with creditors without any difficulty at all. However, once in a while, there is no agreement between a debt counsellor and a creditor. If this is the case, the matter is simply referred to court for a magistrate to make a final ruling on the matter. The final ruling of the magistrate is binding on the creditor to accept the reduced instalment, interest rate and extended terms.
Every debt counselling application is ultimately either referred to a Magistrate’s Court or the National Consumer Tribunal This is to secure a court order from a magistrate’s court or a consent order from the National Consumer Tribunal. Every credit agreement that a consumer entered into before applying for Debt Counselling is legally binding. After a consumer has applied for Debt Counselling, the agreements between a Debt Counsellor and a creditors are legally binding as from the time a court or consent order has been issued.
Therefore a court order is needed to ensure that agreements between a Debt Counsellor and creditors are legally binding and supersede the original credit agreements.
The first instance where you may appear in court for your Debt Counselling court application is where you choose and want to be present for the court session.
The second instance is where a magistrate has specifically requested that you are present during the court session. Normally a magistrate would do this just to ensure that you understand everything that has been discussed in court with regards to your Debt Counselling application. It is, however, exceptionally seldom that a magistrate would request a consumer to present in court.
Other than the two instances above, you will not be required nor will it be necessary for you to be present in court.
A consumer is over-indebted if they are unable to cover all of their monthly living expenses as well as their monthly debt repayments from their total monthly income. Therefore, if the result of a consumer’s monthly income less total monthly expenses and debt repayments is a negative balance, such a consumer would be over-indebted.
The purpose of the financial assessment is to determine if a consumer is over-indebted and to establish their affordability amount (the amount a consumer can afford to pay all their creditors).
The Debt Counsellor would restructure all debt obligations and negotiate with all creditors based on the consumer’s affordability amount. .
The consumer will make one payment of their affordability amount and the said payment will be distributed towards all creditors by the Payment Distribution Agency
Once you have applied for Debt Counselling with National Debt Helpline, your monthly payments will be debited by our Payment Distribution Agency (PDA) and duly distributed towards all of your creditors. Our PDA is registered and licensed by the National Credit Regulator
For extra peace of mind and security, none of your payments will come directly to National Debt Helpline.
Debt Counselling is for a maximum period of 60 months. This means that National Debt Helpline will ensure that you are debt free within a maximum period of 60 months provided that the consumer continues to make timely and regular monthly payments. Even though the maximum time period is 60 months, National Debt Helpline strives to shorten this time period significantly and has managed to get many consumers debt free within 36 months on average.
You will experience relief immediately. From the time that you complete the application form and return it back to us, you will only be liable to make one reduced monthly payment.
No, you do not need to come to our offices. You may call us on 072 710 6984 or fill in our call me back form. We can assist everyone telephonically and transmit documents electronically. Should you wish to consult in person, please give us a call to make a booking. We would very happy to accommodate you in this regard.
No. The purpose of Debt Counselling is to get you debt free. If consumers were still able to be credit active, it would make it almost impossible to ultimately become debt free.
Yes. Once all of your debts have been paid in full (except home loans), you will be issued with a clearance certificate and may start being credit active again.
Debt Counselling does not limit your contractual capacity other than pertaining to credit agreements. Therefore, a consumer that is under debt counselling may still rent property or enter into service contracts. However, a consumer that is still under debt counselling may not enter into any credit agreements.
A clearance certificate may be issued once all short term debt is paid up in full. A consumer may still have long term debt, e.g. a home loan, and a clearance certificate may still be issued.
National Debt Helpline does not offer consolidation loans. Our objective is to get our clients debt free and not to give them further debt obligations that will put further strain on their budgets and not improve their financial situation.