South Africa has a number of debt solutions in place to assist over-indebted consumers. This includes debt review, administration, and sequestration. Below we discuss each debt solution in brief.
Debt Review
Debt review, also called debt counselling, is an application by a consumer to a debt counsellor to investigate the finances of the consumer. The debt review process has a number of competitive advantages as a debt solution relative to other debt solutions. Debt counsellors negotiate with your credit providers so that you pay reduced monthly instalments that you can afford. Your debt counsellor will also negotiate that you pay reduced interest rates, lowering your total repayment. Finally, your debt counsellor will consolidate all your debt into one, easy monthly payment that pays your debt. With debt review, you can become debt-free without losing your assets, e.g. car and home. You also avoid being blacklisted and avoid large legal costs when compared to all other debt solutions. The process is less costly and easy to implement.
Read more about Debt Sage's Debt Review solution.
Debt Administration
Administration is a legal process whereby the court appoints an administrator to extend your repayment terms. The disadvantage of this debt solution is that the process is lengthy and takes much longer than debt review. Your employers will be advised of you being put under administration, as payments will be deducted directly from your salary. Payments are only distributed every 3 months. This solution is only applicable for debts that total less than R50 000.
Sequestration
Sequestration is legal process whereby an individual’s current assets are sold in order to pay off or lessen their current debt. The court will appoint someone to manage the consumer’s finances. The consumer is forced to sell all their personal belongings/assets. These include their home, car, furniture, etc. Legal costs that a client faces are exorbitant.
Need a solid debt solution? Contact Debt Sage's debt experts today, to review your case and see how we can help you with our debt review services.