1. How much does it cost ?
Debt Counsellors work on a fixed fee structure based on the Fee Guidelines set up by the National Credit Regulator. The fees may vary for each client based on various factors. The cost will be disclosed to each client within the application documentation.
The good news is that with us, you do not need to pay any amount up front when you apply. The fees will only be deducted from your one reduced monthly instalment while you are in the process.
2. How quickly will I be covered against legal action from my creditors ?
As soon as your application form and all required attachments have been received, processed and notification sent out to your creditors, you will be protected against the implementation of any legal action from that day!
3. How long will I be under Debt Review ?
This depends entirely on you! Restructuring debts obviously entails stretching out contractual terms, but the term really depends on the offer you can afford and the reduction in interest rates that can be negotiated. If you increase your instalment later on, your term will be reduced further.
Also remember, you can apply to be removed from the Debt Review process at any time during the Debt Review if you can show that your circumstances have changed in such a way that you are no longer over indebted and can afford your full contractual instalments. If this application succeeds, your debt review will be cancelled and the listing will be removed from your credit bureau report.
If you remain in the process it will be cancelled as soon as all your debts are paid up.
4. What about my credit record ?
Most clients apply after they have already skipped some payments on their debts. Skipping payments on your debts will already give you a bad credit record, disqualifying you from obtaining credit from reputable credit providers. The listing of your Debt Counselling will only be on your credit record for as long as you remain in the process. Once the process is cancelled your name will be cleared.
5. Why don’t I just apply for a consolidation loan ?
You cannot borrow your way out of debt, much like you cannot dig yourself out of a hole, you will only dig yourself deeper. To get out of a hole, you need a rope, not a shovel.
Consolidation loans may reduce your installments somewhat but your total debt load will increase substantially. They also carry heavy interest rates, some up to 35% per year with a term running several years. When you settle your debts like this, you are not settling anything, you are just moving your debt to the consolidation company and that means the original capital plus interest and finance costs gets refinanced with more finance costs and interest added on top of that. Once the term starts, you will be bound for several years, unlike debt review where you can cancel the process if you can afford your credit again.
Finally, if your credit record is impaired to a certain point, you will not qualify for a consolidation loan anyway.
