Debt Review Offers Legal Protection

Debt Review Matters And Legal Fees

Have you ever been in the situation where you make an arrangement with a creditor to pay them back a smaller amount and feel relieved when they agree, only to have a different person from the same creditor call weeks later and demand a different repayment arrangement?  It can be frustrating to keep getting these calls and to never have clarity on exactly what the creditors are happy with or not.  You constantly worry that you may receive a summons because one of your credit providers is starting to take legal action against you.  That is very stressful!

With debt review that is not the case.  Debt Review and Debt Counselling is part of a legal process of restructuring your debt. What this means is that because every debt review matter goes before a judge, magistrate or tribunal, you get finality and the protection of a court order.  The restructuring plan is set out in a court order. That court order means that credit providers can’t later change their mind and try sue you.  The matter has already resolved in court.

‘Since debt review is a legal process, you will probably also need some legal help from an attorney’ 

Since debt review is a legal process, you will probably also need some legal help from an attorney or from the Debt Counsellor to get the court papers and court order in place. There are small costs associated with the legal side of things that are built into the process, but these small costs are worth the peace of mind, knowing you have a real solution in place that everyone is obliged to stick to.

Debt Review matters can be dealt with by either your local Magistrates Court, or in some cases by the National Consumer Tribunal (NCT).  In either case, your Debt Counsellor will need you to sign an ‘affidavit’ which is a legal document that simply shows that you agree to the repayment plan and really want to pay off your debt through debt review.  Most of the time, that means you will not actually have to go to the court itself and these papers can talk for you.  Ask your Debt Counsellor about what your local Magistrates prefer: You appearing in person to say you agree or just these papers.

 

Magistrates Court

  • Can hear all types of debt review matters
  • Cost vary depending on how long the court matter takes
  • Can issue a binding court order, restructuring debt repayments even if some creditors don’t cooperate
  • Some courts can delay the process unnecessarily or are still unfamiliar with the process
  • Generally shorter waiting times

 

 

National Consumer Tribunal

  • Can only hear certain types of debt review matters
  • Less fees
  • Can only grant a binding order restructuring debt repayments if everyone is happy with the repayment plan
  • Aim to resolve filing issues and make applications work

‘because every debt review matter goes before a judge, magistrate or tribunal, you get finality and the protection of a court order’

Recently, however, some Debt Counsellors have been having a hard time from the NCR in regard to legal fees where matters have gone to the NCT. Many see this as another reason why they should not make use of the NCT (which saves consumers funds) and rather make use of the courts. The new legal fees section of the NCR guideline on Fees states specifically that Attorney’s fees should be levied for legal work relating to the initial court action to get a court order restructuring debt. This differs from the old fee guideline which did not mention which legal work and when in the process these fees were for (remember however that the NCR do not set fees for the industry they only have opinions on what they feel is best suited for the majority of consumers). When consumers now face additional legal action new fees will have to be agreed upon and arranged during or at the end of the process.

 

Your Debt Counsellor will advise you about whether your matter will go to court or go to the NCT.  Each court and each matter is unique.  You should ask your Debt Counsellor in advance what they think the legal side of things will cost.  Every Debt Counsellor will work the legal costs into the debt restructuring plan they put before the courts and send to credit providers.  This means that the legal fees will come out of your monthly repayment amount and you will be able to afford the costs since they are built in.

The legal side of the process offers you and your assets legal protection.

2 comments on “Debt Review Offers Legal Protection

  1. in 2014 i went under debt review with a company named Debtco, to my dissappointment my debts piled up and lots of money was deducted from my bank account and calls started pouring in from creditors i was owing.In 2016 my income strengtens and i took the matter to my hands by paying my debts on my own,which i successfull settled sum and still paying some up to date. last year 2017 i called debtco and demanded that they removed my name as their client under debt review only to be told they dont have my file or their system dont recall me,i called NCR and i was given a name Carla havenga to call and as the comp[any was the one showing to have registered me, in calling her she told me the debt administrator transfer my file with them but my concern is that i was never contacted or informed of their action.

    my question today is how does one get out of debt review ,if she is not happy about the service and her financial are strengten to pay debts under review by herself ? is the a law that protect us from this firms? if YES how do i go about applying to court to withdraw my name.? can i approach the court on my own or i need an attorney to do so.

    2. other query is that of old debts(prescription debts ) of more than three years and debtors never took a judgment againts me ,only to be called by debts collectors after 8 yrs asking for payment arrangement.
    Your responde and advice will be highly appreciated.

    • #2 If you are contacted about a really old debt then take all the details of the company and report it to the NCR because it is illegal if they never got a judgment and if the debt has prescribed
      You can contact the NCR on 0860 NCR NCR.

      #1 Debt review is a legal process regulated by law. Once started it needs to be finished or the debts repaid. Since you have been handling things yourself, you can ask the credit providers that you have paid up to supply you with proof thereof. You can then send this information to the credit bureaus (or lodge a complaint that they are listing you incorrectly in regard to those specific accounts).

      It is possible to apply to a court but the outcome can vary depending on the court. Some courts don’t want to give an order that you are not something (eg. over-indebted and in debt review). Talking to an attorney that is very experienced in these matters will help. Maybe try Kim Armfield, Steyn Coetzee, Liddles or Kemp De Bruyn.

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