RD Debt Counselling is a professional and reliable debt counselling firm in Benoni, Gauteng. We help you become debt free in the shortest possible time.

getting out of debt review

What you need to know about the Johannesburg High Court ruling over debt review

There has been a recent judgement in the Johannesburg High Court about getting out of debt review.  There was a lot of uncertainty before and now there is a final judgement. In this article, we discuss what you need to know about the Johannesburg High Court ruling over debt review.

The full bench, and not just one judge, decided that the only way to get out of debt review is to pay up all your debt.

But this excludes your house. You can leave debt review when all your other accounts are paid up and then you carry on paying your house, and you can get credit again like anyone else.

What happened before the High Court ruling?

It took a few years before we realised we had a problem. People mostly don’t want to get out of debt review just after they have started, it’s only when money starts getting better. As soon as we realised the law wasn’t very clear on when people can leave the debt review process, we went to court.

Previously, different judges and magistrates interpreted the National Credit Act in different ways. Some said that if you offered proof that your circumstances have improved, you can leave debt review and take over full payments. Others said you had to finish the debt review process. This new judgment applicable over the whole country has agreed with the latter.

What this means is that there are a whole lot of people stuck in debt review who either stopped paying when something happened and now pay bits and pieces of their debt when they get a phone call.

Then there are some who took over paying their own debt because their debt counsellor moved or just stopped practicing, and they need to get a clearance certificate to get out of debt review.

At RD Debt Counselling, we have had a lot of people coming to us with these queries and we have started a business called Clear Me where we help people who are stuck in debt review or have bad credit records and want to get them fixed.

Are you stuck in debt review or just can’t get your credit record cleared?

Firstly, we do an investigation. We get the credit reports, check the NCR database, and find out as much as we can about how we can fix your situation.

Once we have worked out what we need to do, then we can sit down with you to discuss how we can sort out your situation.

We can help you to get out of debt review, we can issue clearance certificates, or negotiate with your creditors to get your debt review back on track.

We have lawyers who can go to court if that is necessary.

The most important point is don’t just leave it.  Sooner or later you might need credit and the time to start fixing is not when you need the credit, it’s long before.

So, if you have a problem getting out of debt review, give us a call for a free consultation. Only once we start doing actual work on your file will there be fees, and you will know exactly how much this will cost you. If finances are tight, we can make a payment plan.

Don’t just leave it. Call RD Debt Counselling today.

what is reckless credit

What is reckless credit and why are we so interested in it now?

In this article, we will explain what reckless credit is and we will also discuss why there is an interest in reckless credit at the moment.

There are two reasons for the interest: the first is due to the fact that there has just been a change to the National Credit Act which makes reckless credit investigation compulsory for everyone that applies for debt review.

The second reason is that one of South Africa’s banks has had loans written off in the National Consumer Tribunal for Reckless Credit.

Why was the law changed and how will that affect the average guy who has a few loans and a credit card?

This has been a huge debate in the industry since the National Credit Act started.

There have been a number of landmark cases in the past. A guy in Hartebeespoort got a massive building loan written off, because the loan made him overindebted and as a result the court said it was a resckless credit and wrote the whole loan off.

But a great number of cases have gone undetected. In many cases, the banks will offer a settlement if it looks like it might be reckless, and in other cases, they know the person fighting them is very often not in a strong financial position and will struggle to afford legal fees if the fight goes to court.

Now that the law has changed, a debt counsellor must investigate in every case, and if reckless credit is suspected, refer the matter to the National Credit Regulator.

In another example, a debt counsellor suspected reckless credit and did an investigation.  The numbers such as income versus debt and expenses and the fact that he couldn’t get any assessments from the bank told him something was wrong, so he reported to the National Credit Regulator.

They did an investigation and spoke to the bank and found no reckless credit.  But the Debt Counsellor was convinced he was right, so when the National Credit Regulator rejected the reckeless credit application, he decided to take the case to the National Consumer Tribunal. Here they held a hearing very similar to a court hearing, and they found that 3 of the 4 agreements were reckless, and wrote off all the money, interest and charges.

One of the main reasons here was that the bank didn’t do affordability assessments or keep a record which proved this guy could afford the installments every month.

This all sounds great and there definitely will be advantages for everyone, because the lenders will be more careful before they give money to people who can’t afford it.

But there is another part of the law which everyone has to be very careful of.  When you apply for credit you need to make sure that you have told the truth about all your other expenses and all your other income, because if you have lied about any of that, you make your reckless credit case very weak. The bank does have to check what you supply them, but if the information you gave them affects their decision, you will lose in court. Always tell the truth about other income and don’t hide the expenses you pay in cash.

Make sure that you can afford a loan before you apply for one.  And make sure the figures you give the bank are correct.  If you need to hide away some of your expenses to get a loan, then you definitely can’t afford the loan, and maybe you should be looking at getting some help to get your debt fixed.

If you need debt counselling, contact RD Debt Counselling today.

positive attitude towards debt review

A positive attitude to debt review

This does sound like a strange topic, but when you combine being positive with debt review, good things can, and will, happen. It’s all about having a positive attitude to debt review.

How to combine positivity with debt review

As with everything in life, you tend to attract the same type of people to you. If you like something, you do it and often it goes well. But, if you don’t like something and you have to do it, then it goes badly. That’s how life goes

And it’s the same with debt review

For most people it is not something they planned to do, some people still manage to turn it into a positive experience and some people allow it to affect them negatively.

After over 11 years of debt counselling and seeing thousands of people, we have discovered that it’s the people that make it a positive experience. There are many thousands of people who have successfully finished the process, and can now carry on with their lives.

For example, if someone under debt review paid off in R6 000 installments monthly, they will have an extra R6 000 per month when they have finished the process. And bonus, they will have no debt either.   Can you imagine how happy that person is?

READ THIS: Why was my loan turned down, and some ways to fix it

What debt should the average person have?

There’s the famous saying, the only good debt is no debt. If you can achieve that, it’s wonderful, but for the average person, I think you need 3 types of debt:

  1. Home loan.
  2. Car finance.
  3. Credit card.

I put home loan and car finance together for the same reason. The average person can’t afford to pay cash for a house or car. And the interest rates are lower compared to most other types of finance.

The other credit I believe you need is a credit card, and this comes with a warning.  This credit card is for emergencies only, and if you are not disciplined, then leave the credit card out and stick to the car and house finance.

If you are disciplined, then get a credit card with the highest possible limit. Put it somewhere safe, and only take it out for real emergencies. For example, many hospitals will not treat you without a deposit and you can use your card for that. Or, if your car breaks down and you have to get to work the next morning, you can use your credit card for this emergency.

READ MORE: What is an emergency fund and do you need one?

What if I want to buy shoes and sports equipment or a new fridge and I don’t have enough cash for it?

First thing is to save, open a separate savings account and save for a new cricket bat or a fridge.

The other option is to ask the store of they do lay buy, and pay it over a few months and then get it when you have finished paying.

It will cost so much less to save or lay buy than to buy on credit or take a loan to buy it.

You will have to wait longer, but you will appreciate it more. You will also appreciate the interest, initiation fees and service charges that you don’t have to pay when you go into the shop and buy it cash. Perhaps even try to get a cash discount when you pay.

That has to be a smarter option than a loan.

ALSO READ: What is good debt and what is bad debt?

In conclusion, be positive about everything and you will get a better result.

Get rid of your debt and try to have only a house and car loans, and a credit card for emergencies.

And save or lay buy for bigger items.

If you need help with your debt, contact RD Debt Counselling today.

DCASA Conference

Debt Counsellors Association of South Africa (DCASA) Conference 2019

The DCASA Conference was held on 21 August 2019 at Emperors palace where 220 people attended.

On display were 15 stands with everyone from the banks to insurance and credit bureaus, so that debt counsellors could speak face to face with many of the people who they only talk on the phone to or send emails.

Mike Schussler, the economist who we often see on TV news and economic programs, talked about the economy and the Rand. He predicted the financial future, as economists do, and  while the whole world seems to be struggling at the moment, South Africa seems to be more affected due to corruption involving Eskom, SAA and SABC. To fix these issues will cost a lot of taxpayers’ money.

Robert Rose, the editor of the Financial Mail, also spoke. He has recently written a book on the whole Steinhoff scandal and Markus Jooste’s involvement in it.  He is an investigative journalist who looks for the truth in these stories and it was very interesting and funny to hear his view of corrupt business in South Africa, and what they get away with.

The Head of Legal at the NCR, Timmy vd Gryp, gave us a good overview of what the NCR is doing in the industry and in terms of the law and explained a whole lot more about the Debt Intervention Bill.

Russell Dickerson from RD Debt Counselling as well as two other people from the industry each gave a presentation around industry events  and changes happening in the industry. These talks covered topics like debicheck , reckless credit, what has happened over the last year, and what we expect to see in the next year.

Who can attend the DCASA Conference?

Debt counsellors from all over the country attend the conference. There are also several Credit Providers, some of them have stalls to advertise any new products and to chat to debt counsellors.

All four of the Payment Distribution Agencies were represented during the 2019 DCASA Conference.

Others, like lawyers, people in marketing and people from the insurance industry also attend the DCASA Conference.

Paul Rotherham was the master of ceremonies, where he helped keep the momentum, helped keep things organised and the audience loved his quick wit and his jokes.

 

If you need debt help and assistance, contact RD Debt Counselling today.

debicheck

Debicheck – a new debit order system for South Africa

What is Debicheck and why do we need it?

We need a change in the current debit order systems and there are two main reasons for this much needed change, and for the amount it costs and the amount of work that has been done, there has to be a good reason, and there is.

Debit order fraud………. Many people have had fraudulent debit orders put on their accounts, and part of the problem is that they can’t get the debit orders off if they do find them.

Fraudulent debit orders happen in two ways:

People will phone you and offer you things that are very cheap, so you think well this is worth buying. You will then give them your bank details and delivery address etc. Of course, the cheap cell phone or other goods never arrive, but they have your bank details. Sometimes they will debit your account every month, and other times they sell the info to syndicates somewhere else and they set up debit orders on your account.

We worked with a lady who complained she was having R95 debited from her account every month. This debt order came from a funeral policy place which she had never heard of, and who she never gave permission to. After careful investigation, it became clear that she didn’t really have a funeral policy, just someone taking her money.

Capitec did a survey and found that 35% of people weren’t sure of all the debit orders on their account and that’s exactly what the fraudsters want, someone who isn’t even going to report the fraud because they don’t know about it.

How do debit orders work at the moment and what is going to change?

At the moment, the bank gets an instruction from a debit order company to process a debit order on a clients account, and they are obliged to pay the money. The banks  do not sit with the debit order mandate (the document you signed when you give them permission to debit your account).

Here is how debicheck will work:

Here’s an example: you decide to buy a TV on credit. In the old system, you signed a piece of paper which authorised the shop to deduct R450 per month.  The shop kept the piece of paper in their safe and instructed the bank to debit your account every month for R450, and the bank did.

With Debicheck, there are two changes

First, after you sign the debit order at the shop, they have to send not just an instruction to the bank, but a copy of the debit order.

Then, you have to give the bank permission to let that debit order go through your bank account.  You will receive a SMS or email,  either the same day or the next day, depending on the type, which you have to approve and send back by 9pm, otherwise the debit order will not go through.

What will happen to the debit order if you do not get an SMS or can’t respond by 9pm?

In the pilot phase, the customer authentication mail or SMS has caused problems.  The bank sends the SMS which expires at 9pm and you don’t see it. Or the client doesn’t recognise the SMS and thinks it’s another fraud thing and deletes it.

Because the bank is sitting with the mandate and you have approved it, it will be much harder to send back a debit order unless the amounts or something obvious is wrong, so be aware of that too. You can’t just decide that you need money this month, and  send back all your debit orders.  You have signed and approved, so it’s more difficult.

This system is not being used by all the banks and others yet. At this stage, it does cause problems. The banks and other debit order users are going to have to explain the system very carefully to all their customers to avoid missed debit orders.

What will happen with current debit orders?

From the 1st of November this year, all new debit orders will be Debicheck. There are 36 million debit orders that are processed every month for an amount of R66 billion and about 1 million are disputed every month.

By November 2020, all debit orders have to be converted to Debicheck.

It’s going to be a long process and will affect us all, but it’s a better system.

The moral of the story is, before you give your bank details, ID number and address to someone over the phone, make sure that you know who they are, where their office is, and what they are going to do with the information.

What is the Debt Intervention Bill and how will it affect you?

A new law that affects the debt counselling industry, the Debt Intervention Bill, was passed through parliament and signed by the president 2 weeks ago.

The question on everyone’s lips: will my debt be written off?

The Debt Intervention Bill or Debt Relief Bill is a new law and part of the National Credit Act’s National Credit Amendment Bill. Changes have been made and added to the National Credit Act, which is the act that debt counsellors work under.

How does the Debt Intervention Bill really work?

People often ask: “will my debt be written off?” And while some people will qualify to have their debt written off, most people won’t.

Here are the basic rules:

  1. You have to earn less than R7 500. Remember this is the gross amount (the amount before deductions), so it’s not the amount that you get in your bank account every month.
  2. You can’t have debt that exceeds R50 000. If your debt is R55 000 then you don’t qualify, even if your salary is less than R7 500.

If I qualify, what do I have to do to get my debt written off?

Three possible things can happen:

  1. They will take a look at your salary and your debt to determine if you can afford to pay your debt with no interest. If you can, you will have to do that. In this case, it works exactly like debt counselling, so no advantage to anyone there.
  2. They will take a look at your salary and your expenses and determine whether you can afford to pay part of your debt every month, and part of it will get written off
  3. If you have no income, they can suspend your debt payments for a year

Here’s where it gets difficult. Every year, for the next three years, you have to be re-assessed and you have to prove that you still have no income. This means that each year, you need to go back and get an extension.  If you don’t go, the whole thing falls away and you are no longer protected.

In other words, it’s not that easy to get your debt written off.

Who will be able to get their debt written off?

For one part of the population, this is the best news they have ever heard. We see these people often and who we can’t help. This is because something has happened in their lives which has turned it upside down. You could have had an accident and instead of earning R20 000 a month, you now earn R1 600 disability cover monthly. In this case, you are struggling to pay off your debts (which you could so easily do previously) and you have collection agents calling and knocking at your door all the time.

It’s these people that have no legal process to stop the continuous harassment from Credit Providers, Collection Agents and Legal collection firms.

For these people, this is the best law ever

For those who want their debt written off, if you are working and earning a salary, you might get some written off, but they might not write it all off.

What about fraud?

There is absolutely no-one in South Africa who can process an application for the Debt Relief Bill.

The regulations around this process have not been written.

The only people who have the right to do this is the National Credit Regulator and they have not started with applications yet.

So, while there is lots of excitement about debt being written off, most people won’t qualify.  Some will have their debt written of partially, and others will have all of their debt written off.

Be aware, if anyone tells you they can help you and they are not working for the National Credit Regulator, then don’t listen.

debt intervention bill

SOURCE: Sunday (Business) Times

If you don’t qualify, and you need help with your debt, contact RD Debt Counselling today.

 

credit numbers in south africa

Credit numbers in South Africa – what you need to know?

Some interesting credit numbers emerged from the recent National Debt Counsellors Conference at Emperors Palace recently. 

The world and South Africa’s economy are looking a bit bleak. As they say: “When America sneezes the rest of the world catches a cold”. The American economy is not looking great, so it’s a worry for the rest of the world.

Last year, household debt was going down, but this year it is increasing again. This is not a good sign.

READ MORE: World population, debt and retirement savings – what you need to know

Here are some interesting credit numbers in South Africa:

42% of the credit in the whole country is granted in Gauteng.  This is a big number especially when you consider we have 11 provinces.  Gauteng is the smallest province by size, and yet almost half of South Africa’s credit is granted in Gauteng.

To compare the other provinces

  • KZN is 14%
  • And the Eastern Cape is 6%
  • In the Western Cape, it’s 17%

This shows that Gauteng really is the financial powerhouse of SA when it comes to debt.

Another fascinating credit number:

Short term loans (month end loans and short 3 month loans) in South Africa are the worst paid.

There are about R1 Billion worth of short term loans, and 30% of those are in arrears. On the other side of the financial scale, there is R80 Billion outstanding on home loans, and only 8.5% of people are in arrears.

Some of the arrears might just be a short payment in one month which can easily be fixed.

30% arrears are on short term loans, and 8.5% on home loans. This is a lot of money outstanding but 30% is unacceptable because one in three short term loans is not being paid correctly.

What does the debt situation look like in South Africa?  

The South African population is about 60 million, give or take a few million.

There are 25 million people who use credit in SA. This is a bit less than half the population (considering that there are a lot of children counted in the 60 million number).

Out of the 25 million people in SA who use credit, how many do you think have a bad credit record? This can be anything from one short payment to judgements. In other words how many people are not up to date with everything?

The short answer? About 10 million.

So 10 million out of 25 million have a bad credit record. That’s 40%! Two out of five people have problems with credit and if they had to walk into a bank and ask for credit, they would be refused.

ALSO READ: What is good debt and what is bad debt?

We always urge people to look at that credit record and get a free credit report, so that they don’t get a surprise when they apply for car finance or a loan and are turned down.

Why do we not have 100% good debt payers in South Africa? Can debt counselling fix this number?

It would be very nice to have 100% good debt payers in SA, but that hasn’t been achieved anywhere around the world.

A lot of the 10 million people have minor things wrong with their accounts (an old account that wasn’t settled or a dispute on a clothing account item returned, etc.). On the other end of the scale, quite a few are already being sequestrated or are in administration, but debt counselling has already helped many thousands of people to have a good record again.

But the numbers tell us that there are still many people out there who need help.

At RD debt Counselling we have a division for new entrants to debt counselling, and, a division where we do credit clearances, debt review clearance and take over and fix old debt review.

For any debt help and assistance, contact RD Debt Counselling today.

What to do if you are unhappy or can’t find your debt counsellor

What to do if you are unhappy or can’t find your debt counsellor

What happens if I can’t find my debt counsellor?

Fortunately there is a process if that happens. A new debt counsellor can take over your account. The best is that you find the debt counsellor that you like, meet with them and if they accept you, you transfer to them and carry on your debt review. If you have finished paying, they can exit you from the process properly.

If you are unhappy with, or are not getting decent service from your current debt counsellor you can transfer to another without any cost to you.

READ MORE: Does debt counselling really work?

Why would a new debt counsellor not accept me?

Some debt counsellors don’t accept transfers at all, and the main reason is that you don’t know if the other debt counsellor did everything right. This means that you inherit their problems, and most often, they are not prepared to take the chance.

Most debt counsellors will accept you if you have been paying your debt review properly, every month like the court order says.  At RD Debt Counselling we will accept you if you have been paying properly, or if there is a good reason why you haven’t been paying, we will try to restructure your things if they were done incorrectly, most of us work on a case by case basis.

Are the banks really helping people to get out of debt?

Yes they are helping. Banks have certain amount of responsibility, because they gave the loans in the first place and they also want their money back.

They do allow interest rate reductions very often, and they take the monthly account fees off when you are in debt counselling, so it is a huge saving and it helps people to get out of debt quicker.

When in debt counselling, you never have to pay back the interest concesssion. This means that you don’t get to the end of debt counseling and still have things to pay. When your debt counselling is finished, all your accounts are paid up and you are finished.

Need help with your debt? Contact RD Debt Counselling today.

Wills, living wills and why you need one

Wills, living wills and why you need one

What is a will?

A last will and testament is a legal document that communicates a person’s final wishes pertaining to possessions and dependents.

Why should we have a will? 

So that you can say who gets what after you pass away. A will is often used to avoid family fights. It is important to make it clear in your will who will get what portion of your money, trusts, and or estates.

How often should you go back and check your will?

Every 2 years.

Things change and the experts recommend every 2 years. It is important to think about your will regularly, read it every now and then, and if you see that it’s out of date, get it updated.

What happens when someone dies without a will?  

There is a formula for who gets what and the law decides, nobody else has any say.

Normally the estate goes to the next of kin, and if you have a surviving spouse or child they will get everything

In this case, the division could not be what you have wanted, and therefore it is important to have a will.

What is a living will?

A living will, also called a directive to physicians (an instruction to your doctors, if you get sick or are in an accident and you can’t speak for yourself) leaves an instruction. It could be something along the lines of do not resuscitate, don’t keep me alive if I am on life support or do keep me alive no matter what.

If you want a family member to make your medical decisions for you when you are unable to do so, you can create a health care power of attorney to give someone that decision-making authority.

Do you have to nominate a guardian of your choice for your minor children?

If you choose to appoint a guardian for your children, you have to add this to your will. There are other legal forms of guardianship, but for the average person, putting this in your will, will be enough.

Need more advice? Complete the form below.

World population, debt and retirement savings

World population, debt and retirement savings – what you need to know

Statistics SA have released a study about the world population to mark World Population Day, which was celebrated on the 11th July, and compared South Africa to the rest of the world.

Some interesting figures from the report:

The SA population is at almost 58 million, and there are 7.7 billion people in the world. This means that in SA, we have less than 1% of the world’s population.

The study predicts that the world population will reach 8 billion by 2030.

There are several reasons for the world population increasing at a rapid rate. An important question to consider is why the population is increasing so fast.

People are being born all the time, so it seems obvious that that is the reason for the increase.  But, people die as well. Surely that should balance out, right?

No, there are more people being born and fewer people dying because safety, healthcare and medicine are getting better and people are living a whole lot longer.

The number of births is increasing and the number of deaths is decreasing, which is accelerating the population growth.

What does population growth mean for the people?

Apart from the fact that space in the world is becoming less and less, a really interesting fact to note is that people are living longer and longer as medicine gets better and as diseases and epidemics are better controlled.

Which leads us to consider retirement. If people are living longer, they need money for longer after retirement. This means you have to save even more money for your retirement. This makes it even more urgent if you haven’t saved enough or if you haven’t started saving for your retirement yet.

How to start saving for your retirement

First, take a look at your debt. If you have any debt, read more here on how to get out of debt.

It’s often very difficult to save or have a retirement plan if you are always in and out of debt and particularly if you are overloaded with debt.

If you need assistance, try speaking to financial advisor, so that they can make a plan that is specifically for you.

Some people have a paid up house, so they do not worry too much about housing in retirement. Others want to have R20 000 a month when they retire or they need R50 000 a month. In cases like these, it is best to get someone you trust to work out a plan that is designed for you.

READ MORE: Does debt counselling really work?

If you have problems with your debt and want to get out of debt, contact RD Debt Counselling today.