Sept 2012

Don’t swim against the current if drowning in debt


Don’t swim against the current if drowning in debt

Marilyn Williams - Registered debt counsellor

Are you drowning in debt? If the answer is yes, you are one of many South Africans who have been caught in the debt trap and are being harassed by debt collectors. The situation has been worsened by rising food and fuel prices and job losses.

To top this, we also live in a proud society where most people are embarrassed to admit that they are struggling to meet their monthly obligations, let alone discuss it with a total stranger.

But you don’t have to swim against the current if you’re drowning in debt. The National Credit Act makes provision for the registration of debt counsellors and debt restructuring. Consultation with a debt counsellor means that you can get immediate relief in terms of your monthly commitments while enjoying the full protection of the Act.

Sadly very few South Africans are taking advantage of this shield. Once you have received a Section 129 (required procedures before legal action), you normally have less than 20 days to seek the services of a debt counsellor. Often consumers that are over-indebted do not open or read their mail.


Ignorance is no excuse

Many feel that this is just a constant reminder of how depressing their situation is. Unfortunately, this also means that they do not know about the legal steps the credit provider has taken to recover the outstanding debt.

Ignorance is no excuse and results in a summons being issued, judgments being taken and/or property being repossessed and auctioned off in a bid to recover outstanding debt.

When you apply for debt counselling, you complete a basic application form. The debt counsellor uses this information to determine if you are over-indebted. If your application is successful, the debt counsellor will contact all your credit providers and advise them that you have applied for debt counselling.

All credit providers are obliged to stop any intended legal action immediately and offer the debt counsellor a chance to negotiate on your behalf.

Your debt counsellor may take up to 60 working days negotiating on your behalf. However you are able to get relief in terms of reduced instalments immediately. During this negotiation period it is important that you continue to pay the reduced instalment as recommended by the debt counsellor.

Debt review is designed for the ordinary per- son to be able to retain their assets even in the middle of a financial crisis. Do not wait until an auction date has been set for your property. Most clients do not know that approaching a Debt Counsellor timeously can help save your home from being sold to recover debt.


Know your consumer rights

Every day hundreds of vehicles are unlawfully repossessed in South Africa. Instead of obtaining an attachment order, tracing agents are merely intimidating clients into signing a Section 127 (voluntary surrender of goods) form. If the court has not issued an attachment order yet, you may still apply for debt counsel- ling and include the vehicle finance agreement, even if it is already in arrears.

The debt counsellor can restructure all credit agreements, including incidental credit agreements. These include, but are not limited to, mortgage loans, vehicle finance, credit cards, clothing accounts, furniture accounts, personal loans, micro loans and overdraft facilities.

It is essential that you become aware of your consumer rights. In doing so, you can inform other consumers about their right to approach a debt counsellor proactively to avoid legal action.


For more information, call the National Credit Regulator: 086 0627627 For information on debt restructuring, contact the D C Clinic tel: 086 1777293 e-mail:; website:

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