Debt counselors assist members of the public who are over indebted to pay off their debt. Over-indebtedness is when a consumer is unable to meet all their debt obligations timorously. A debt counselor acts as a bridge between consumers and credit providers. A counselor's purpose is to ensure that a consumer's income is used efficiently and that his /her debts are eventually paid up in full. In other words a debt counselor negotiates repayment schedules with creditors on behalf of the consumer.
The Debt Review Process STEP BY STEP:
Step 1 |
Contact SPRUYT INC Attorneys at 012 430 7871 and speak to someone in our debt review department. We will explain the process and costs involved and proceed to schedule a consultation with you and explain what documentation we require for STEP 2.
(THE CONSULTATION WILL BE SCHEDULED AT A TIME AND PLACE THAT SUITES YOU)
Step 2 |
During the consultation you shall complete an application form (FORM 16). We shall do an assessment to check whether you qualify for debt review. If you do qualify (in other words you are over-indebted) we will continue to step 3.
To access if you are over indebted we will compare your monthly Commitments with your monthly Debt Obligations
FOR EXAMPLE YOU OWE THE FOLLOWING INSTALLEMENTS TO YOUR CREDITORS MONTHLY: | |||||||||||||||
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BUT YOU ONLY HAVE R 2000-00 AVAILABLE EVERY MONTH TO PAY, YOUR THEN ARE OVER INDEBTED AND QUALIFY FOR DEBT COUNSELLING) | |||||||||||||||
If you’re not over-indebted we will advise you of other options.
Step 3 |
We will notify all your credit providers, the NCR and the credit bureaus of your application for debt review by sending out FORM 17.1's The credit providers will adjust their systems to show that you are under debt review.
Step 4 |
We will work out a budget in accordance to your assessment done during the first consultation.
The budget is calculated as follows:
| Salary: | Minus deductions ( this includes TAX, PAYE, garnishee orders) | = amount available for debt review, (rehabilitation amount). |
| -Minus necessities (this includes rent, water and lights, insurance on vehicles and house hold items, cell phone contract fees, school fees, food, medical expenses, travel expenses for example petrol, Taxis and any item needed for survival) | ||
| You need to approve your budget! | ||
Step 5 |
The credit providers are obligated to send us information regarding your accounts including the outstanding balance, interest rate and the monthly installment. Once we have this information and your budget is assessed, we will send out a proposal to all of the relevant credit providers, the NCR and the credit bureaus.
Step 6 |
After 60 Business days has lapsed you will pay the agreed amount to the Payment Distribution Agency (PDA) and the PDA will proceed to pay the proposed amounts to each credit provider. You are required to make the agreed monthly payment each month to the Payment Distribution Agency (PDA) for the duration of the debt review. Your budget may be reviewed if your financial situation changes.
Step 7 |
The Credit Providers may accept the proposals and if all they do, we will obtain a consent order which will then be forwarded to all the credit providers.
If one or more of the Credit Providers does not accept the proposed repayment plan, we have to submit a court application to court (in the area you reside or work) for the Magistrate to make a final decision.
Step 8 |
Once all your debt is repaid, we will issue you with a clearance certificate which we will send to all your credit providers, the NCR and the credit bureaus thus you credit record will be cleared.
COST INVOLVED FOR DEBT REVIEW.
IT IS IMPORTANT TO REMEMBER THAT FROM DATE FROM YOUR APPLICATION FOR DEBT REVIEW YOU DO NOT PAY ANY OF YOUR CREDITORS ANY INSTALLMENTS FOR A PERIOD OF 60 BUSINESS DAYS.
This is legal and can be confirmed with the National Credit regulator.
The reason for this is to enable you to afford help!
The costs involved are as follows:
| First consultation : | R 60-00 |
| Debt counselors Fee: | Is the amount you have available for distribution to your creditors( For example if you only have R 2000-00 available to pay your creditors every month, your debt counselor only receives a fee of R 2000-00 within the first 30 business days) this amount however may never exceed the prescribed rates of the NCR |
| Attorneys Fees: | All inclusive fee of R 3500-00 this amount never escalates (HOWEVER if you cannot afford this amount arrangements ARE made for you. This amount also gets paid within the 60day period.) |