2nd CHANCE Debt Counsellors

a second chance to financial freedom

Frequently Asked Questions

Is Debt Counselling a legal process?
Yes. Debt Counselling was introduced by the National Credit Act (NCA), which came into force on 1 June 2007. The Act makes provision for legal protection for consumers who apply for Debt Review. A Magistrate’s Court Order concludes the Debt Restructuring process. 

I can’t pay the full instalments on all my accounts every month. How will Debt Counselling give me relief?
From the first month, you could enjoy lower instalments on your accounts, depending on what you have available after your living expenses are taken into consideration. We’ll negotiate with your creditors, giving you that much needed break from the stress. Your creditors cannot take legal action against you or repossess your assets for at least 60 business days, once you have applied for Debt Review.

I can’t afford to pay my bills. How can I afford Debt Counselling?
Once you start paying your Restructured repayments to a Payment Distribution Agency (PDA), which has been approved by the National Credit Regulator (NCR), the PDA will pay the Debt Counsellor’s fee from the first month’s instalment.

Can anyone place me under Debt Review?
No. Only Debt Counsellors, who have met the criteria, stipulated in the Act and the Regulations, and who have been registered by the NCR, may conduct Debt Review. It has become a recent practice that people are called and explained the debt review process over the telephone and they are loaded on the NCR's system as being under debt review without signing any documents. Ensure that you always advise anyone that calls you, that you will only consider yourself as being under debt review, only once you have signed the relevant documents.

How do I know that the Debt Counsellor will not take my money and “disappear” with it?
You do not pay your monthly installments to the Debt Counsellor. Your total monthly repayment is made to a Payment Distribution Agency (PDA), which has been approved by the NCR. Debt counselors are not allowed to receive any debt review payments from clients.

Will creditors still put me under pressure, if I am under Debt Review?
You no longer need to negotiate with your creditors. 2nd Chance Debt Counsellors will do this on your behalf and we shall inform all of your creditors that you have applied for Debt Review. They need to liaise with us in terms of providing information and negotiating. We’ll, in turn, keep you informed of the progress. If a creditor contacts you directly in connection with your account, you must them to us.

Can I apply for credit, whilst I am under Debt Review?
No. We will however, assist you in compiling a budget, which will make provision for your monthly living expenses. This should ensure that you have cash available for the short term items, like food and clothing, thereby eliminating the need for credit.

Will Debt Review not “blacklist” me and prevent me from ever applying for credit again?
You are not “blacklisted” when you apply for debt review. Your Credit Record will be flagged with various codes throughout the process, but once you are no longer under debt review, the Debt Counsellor will issue you with a Clearance Certificate and all listings associated with the paid off debt must be cleared from your credit record by the Credit Bureaux.

I have been “blacklisted”. Can a Debt Counsellor still help me?
This would depend on whether your “blacklisted” debt has been through a court process. If a judgement has been issued against you, we cannot include that particular debt in your debt restructuring and the judgement can remain on your record until that specific debt is settled. You do have the right to challenge information contained in your credit report. Feel free to contact us for advice.

Is this not Administration?
No. Administration is more expensive, takes much longer and is only applicable to consumers with debt totaling R50 000 or less. Details of this can remain on your credit record for up to 10 years.

I use my Store Cards to buy clothing and food. How will I survive if they cannot be used while I’m under Debt Review?
At 2nd Chance Debt Counsellors,we assist you in compiling a budget, which includes your essential items like food and clothing. The amount allocated for these items should be sufficient in order to make cash purchases. You will then, no longer require the cards, saving you money, as items can be bought at cheaper prices and without interest and charges.

Can a Debt Counsellor tell me what my rights are, as a consumer?
Yes. Debt Counsellors are required to undergo training related to the National Credit Act, which has introduced new consumer rights.

I have a Garnishee order and one of my accounts has been handed over. Can these be included?
Emolument Attachment Orders (commonly known as Garnishees) have been made by a court. They can therefore, not be restructured. “Handed over” could have various meanings. The Debt Counsellor would have to determine at what stage the debt is to know whether it is not too late to include. Remember that if you act early enough, your debt can still be included. Do not ignore Section 129 letters (see below), but rather refer them to 2nd Chance immediately for advice on what to do.

What is a Section 129 Letter?
In terms of Section 129 of the NCA, creditors are required to inform you in writing that you are in default, and request payment or arrangements, before they can take legal action against you. You would then have at least 10 business days before they may commence legal proceedings against you.

Do I still need to contact my creditors and do I still need to pay them?
Once you have applied for Debt Review, 2nd Chance will make contact with your creditors. You will pay one amount to the Payment distribution agency and they will pay all your accounts every month.  

Can any of my accounts be excluded from Debt Review?
Some accounts like cell phone contracts and accounts for which a judgement has been obtained, cannot be included. All other accounts which qualify, has to be included in your debt restructuring. Some cellphone companies, schools and doctors allow for the accounts to be included.

How do I get my Credit Bureau report?
You are entitled to obtain your credit bureau report, free of charge, once every 12 months, directly from the credit bureau. If you are unable to obtain it yourself, we can request it on your behalf at a cost.