Debt Counselling is a process that is intended to help restructure the debt obligations of consumers who cannot pay their debts. A repay- ment plan that is affordable to the consumer and acceptable to the creditor is developed by a Debt Counsellor and made an order of Court. All monthly debt obligations are consolidated into one monthly instalment.

• If not already listed, you will be protected from being blacklisted;
• Credit Providers must communicate with us, not you: “Don’t speak to me, speak to my counsellor!”
• Repossession of your assets will be prevented where possible – this includes retaining the home and a vehicle where possible;
• You will pay only one affordable monthly instalment;
• Debt Counselling provides you, the consumer, with an acceptable standard of living while repaying your debts;
• Your debts will be reduced to manageable levels;
• Debt Counselling provides you with an agreed, affordable and realistic monthly budget in order to resolve the situation in the shortestpossible time
• Improved overall financial position.

The National Credit Act requires a credit provider to ensure that a consumer can afford the credit he/she applies for before granting him/her the loan or selling the goods on credit. If the credit provider fails to ensure this, then the agreement can be regarded as reckless.

Credit is lent recklessly if:

• The credit provider does not do a proper assessment to ensure that the consumer can afford the loan,
• The credit provider grants the consumer the loan despite the consumer not being able to afford the loan, or
• The consumer does not understand his/her rights and obligations in an agreement, as well as the costs involved in taking
  the loan.

• Your right to the prohibition of reckless lending will be asserted;
• Once notified, credit providers must communicate with us, not you;
• If an agreement is found to be reckless, the Court will:-
  • make an order setting aside all or part of the consumer’s rights and obligations;
  • suspend the force and effect of that credit agreement;
• Where the Court makes the above orders:-
  • you do not have to make any further payment to the responsible credit provider;
  • the responsible credit provider may not demand any payment from you;
  • no interest, fee or other charge under the agreement may be charged to you.
• Enjoy significant advantages resulting from reduced repayment obligations

It means that when debts are old, debtors are no longer legally obliged to pay. Sadly, many South Africans do not know that some debts prescribe.
Legislation is comprehensive, but in essence, most debt is deemed to have prescribed if;-

• It has been three years since your last payment, and
• in that time you have not acknowledged the debt in any way, or
• been summoned in respect of the debt.

Certain debt does not prescribe, such as municipal debt, mortgage debt (home loans), TV licence debt and taxes.
However, most of the debts currently being “chased” by debt collectors and credit providers – such as clothing accounts, gym member- ships and personal loans – do prescribe after three years of inactivity.

• Once notified, credit providers must communicate with us, not you;
• You do not have to make any payments to creditors in respect of prescribed debt;
• After finalisation of the process, the balances of unpaid debt must be written off by creditors;
• Creditors may no longer demand payment from you for prescribed debt;
• If blacklisted for prescribed debt, the listing must be removed.
• Enjoy the advantages resulting from reduced debt obligations.