Frequently asked questions
Does my spouse have to apply for Debt Counselling too?
If you are married "In Community of Property" then your spouse will have to apply for Debt Counselling too. If married "Out of Community of Property", Traditionally, are Divorced or Single then you can apply without your spouse/partner.
It is important to note though that regardless of how you are married, debt affects the whole family. It is often true that while one spouse is trying to manage debt, the other may be creating more debt. This does not work. Money and debt should be dealt with together in a marriage. Consider involving your partner/spouse in this plan and become debt free together.
Can I exclude some accounts from this process?
No. All accounts must be included.
1. Where a Section 129 notice or Judgement has already been obtained on an account. If you are unsure if the above applies to you then you can discuss this with your Debt Counsellor. Your debt counsellor will be in a position to determine or investigate this on your behalf.
2. Home Loan. If you are able to maintain the original contractual installment on the home loan, then this account can be excluded. However, you will not benefit from the 20% reduction in the installment or the lower interest rate that debt counselling can provide you. Your home loan will also not benefit from the legal protection that debt counselling offers if you are currently in arrears with repayments or have made payment arrangements with your bank.
Asset Insurance and Credit Life Insurance?
1. Vehicle. Your vehicle must be insured, even under Debt Review. This is a condition of the original contractual agreement with your credit provider as well as a condition of the new renegotiated contract under Debt Review.
2. Credit Life Insurance. This must be included in the Debt Review installment. However you are entitled to find cheaper insurance to reduce expenses. The cheaper insurance must be in line with the benefits that your credit provider offered on your credit facility. We will assist you in reducing Credit Life Insurance premiums in line with those requirements.
3. Pension and Life Insurance. You can continue to contribute to these policies and they will form part of your budget.
4. Home Owners and Contents Insurance. Shop around for better premiums. Make sure that the contents insurance is reduced each year in line with the depreciation of your assets.
5. Other policies. We would suggest that you consolidate policies to reduce expenses. As an example, we often find that our clients have 2 or 3 funeral cover policies, which is unnecessary. Take a good look at all of your policies and consolidate or reduce where applicable.
How long does it take to become debt free?
This is actually dependant on the type of debt you have and also how much debt you have. We have clients that have completed Debt Review in 12-24 months because they predominantly had pay day loans and short term loans.
However in general the average consumer can expect to be under debt review for 48-60 months for unsecured debt and 60-72 months where vehicles are involved. Home Loans are released from the process when unsecured debt and vehicles are settled.
It is important to note that no matter what the new term is, you can pay more at anytime in order to become debt free faster. We conduct an annual review of your budget and encourgage you to pay a little more each year. An additioal R500.00 can reduce the term under Debt Review by up to 12 months. You are not locked into a term based on the Debt Review Contract. You can also settle debt in full at any time. e.g. inheritance, retrenchment package, pension payout etc.
What happens to my cellphone contract?
You can keep an existing cellphone contract as long as it is up to date and as long as you keep paying the contract on time each month. Cellphone contracts that are in arrears will be included in the Debt Review Process.