Luckily, a law called the National Credit Act (NCA) does offer a way to help you sort out your financial affairs.
National Credit Act
The National Credit Act allows for special experts called Debt Counsellors to help people deal with debt. These people are registered (signed up) with the National Credit Regulator (NCR).
Credit is when a company gives you money or goods that you only have to pay for afterward.
The NCR is the South African authority that makes sure that all creditors (companies that offer credit) act legally. All Debt Counsellors must have an official number from the NCR.
The process through which Debt Counsellors help is called a Debt Review (DR). If you are unable to pay back your debt, you can be placed under Debt Review. This is a formal and official system that works according to the rules of the law.
In a Debt Review, the Debt Counsellor helps to create a plan for how you can start making payments in a way that you can manage, while also still having enough money for your necessary expenses. They will also negotiate with the people and organisations to whom you owe money.
They will get approval or court order that accepts the new repayment plan.
The main benefit of Debt Review is that it can protect your assets from being repossessed by the credit provider. This means that whoever loaned you money or gave you credit cannot now take any of your possessions or sources of money, besides what has been agreed to in the payment plan.
You will be listed at the credit bureau while under Debt Review. The Credit Bureau is an organisation that collects information about people who are in debt and therefore should not be given credit at the moment.
Therefore while under Debt Review, you will not be able to apply for any credit; however this is a good thing, as it stops you from finding yourself in even more money trouble!
You will only be allowed to exit from debt review when you have settled all your debts – except for car or house financing.
The National Credit Act (NCA) also allows for an institution called the National Consumer Tribunal (NCT) to be established. The NCT is able to decide if the person or organisation that gave you credit was reckless (not careful or responsible) in doing so.
If at the time you were given credit, you were already in too much debt – and the creditors did not follow steps to make sure you could afford more debt – they can be held responsible.
The NCT might even rule that the credit agreement between you and the creditors is null and void (not legal). Therefore your debt to them might even be cancelled.
Remember, if you find yourselves drowning in a debt disaster, Legal&Tax can dive right in and help you rescue your Rands.
We offer registered expert Debt Counsellors who can be your companion in coming back to savings sanity. Call 0860 587 587 or SMS "Debt" to 31690 and we'll call you back.
