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  Legalwise Wiseup  
     
  31 January 2018  
     
 

image 1Frequently asked questions
LegalWise gives you the answers on debt and debt counselling.

When is a consumer over-indebted?

> A consumer is over-indebted when s/he is unable to comply, in a timely manner, with his/her obligations under all his/her credit agreements. This generally means that the consumer does not have enough money to pay all his/her debts on time.

Will a spouse also be affected by debt counselling?

> If a consumer is married in community of property, his/her spouse must also go under debt counselling. It is the joint estate from the marriage and not their separate estates that will go under debt counselling.

> If a consumer is married out of community of property, his/her spouse does not have to apply for debt counselling with him/her, as they have separate estates. The couple can decide to apply for debt counselling together if they have a joint debt.

Can any of the consumer's debts be excluded from debt counselling?

> Yes, but only in instances where a creditor already instituted legal action (for example, issuing a summons) against the consumer for arrear payments of that specific debt.

> The legal action must have been instituted before the consumer applied to go under debt counselling.

> If this is the case and the debt is excluded, the consumer may still make a payment arrangement with the creditor to pay off the debt, but it will not form part of the debt counselling.

Will being under debt counselling be listed on a consumer's credit report?

> Yes, a consumer's credit report will show that s/he has applied for debt counselling or is under debt counselling. This listing will show on his/her credit record until a clearance certificate has been issued and provided to the credit bureaus.

> When a clearance certificate has been issued and sent to the credit bureaus, they must remove all debt counselling listings from the consumer's credit record within seven days.

> If a consumer cancelled the debt counselling in court, s/he can also send that cancellation order to the credit bureaus.

What is a Payment Distribution Agency (“PDA”)?

> A PDA is accredited by the National Credit Regulator (“NCR”) to collect money from consumers who are under debt counselling and to distribute it to their credit providers.

> This means that consumers do not have to give their monthly payments to the debt counsellor, but rather use a PDA to pay money over to credit providers. Alternatively, debt counsellors can receive the money, but must then pay it to the PDAs to pay the credit providers.

> A consumer can choose to continue to pay his/her credit providers directly, instead of using a PDA. However, the consumer will then be held responsible for any non-payment.

 

 
 
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  Inside this Issue no 12  
 
Letter from the CEO
Legal Expenses Accidental Death Benefit
Getting to know the debt counsellor and the consumer
Actual case: Nedbank Limited v Jones and Others
Exit this way:
can you cancel debt counselling?
What is an Administration Order?
What is an Emoluments Attachment Order (“EAO”)?
What is a Will?
Empowering the community of Zandspruit through financial literacy
Frequently asked questions
Making it easier for you to keep in touch
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