The Debt Counselling Process

How do I do this?

There is no one size fits all solution to a Debt Problem. Debt is personal, so we tailor our solution to you. We take a look at every influencing factor and make sure that the solution is one that will solve the problem without putting you under unnecessary strain where possible.

This is a TWO part process, with TEN steps to financial freedom!

Below you will see the Two Part Ten Step process briefly explained, as well as an example of how Debt Counselling and a restructured Debt Repayment Plan can help you!

Part One:

1. Credit Check 

  • Bring along a copy of your ID card, proof of income and address, 3 months bank statements and proof of marital status and we’ll check where your credit stands

2. Budget for  Living Expenses 

  • We’ll work with you to determine how much you spend each month in order to survive

3. Determine the Amount Available to pay off Debt

  • Now we see how much leftover cash there is each month that we can use to pay off your debt

4. Make any Adjustments to budget 

  • Your monthly budget may need to be adjusted so that the amount available is sufficient to settle your debt in a reasonable amount of time

5. Formal Application

  • Once the Formal Application is signed, you are under Debt Review. Once this step is finanlized, you cannot make any more debt and your assets are protected by the Debt Review Agreement so long as you are making the necessary payments.

Part Two

6. Notifying the Creditors  

  • We will get in touch with the people you owe money to within FIVE BUSINESS DAYS to let them know that you are under Debt Review

7. Over Indebtedness Confirmed 

  • Within TEN BUSINESS DAYS we will asertain whether there is any amount we can save with the linked credit life insurance

8. Proposal sent to Creditors

  • Within ONE MONTH we will send proposal to your creditors with the new amounts you are able to pay to cover your debt. We will discuss any counter proposals and/or acceptance with you as soon as we hear back from your creditors

9. Court Application

  • Within TWO MONTHS your application will be heard in court and a rearrangement order is granted for your New Debt Repayment Agreement

10. Pay your new installment every month and become Debt and Financial Stress free!

Lets talk about Ms. Cabinet

Ms. Cabinet came to us in 2018 with R287 794.00 of debt to pay back to various creditors. Every month, she was having to pay R11 812.16 and she had to do so for the next 6 years if she wanted to get out of debt. 

With a monthly income of R20 320.00 after deductions and living expenses of around R13 900.00, it meant that Ms. Cabinet only had R6 420.00 available to pay back her debt. 

After completing PART ONE of the Debt Counselling Process, Ms. Cabinet went under formal Debt Review. We got in touch with all her creditors, which included banks, fashion shops and independent microlenders, to notify them of Ms. Cabinets new arrangement. After some back and forth, all the creditors agreed tot he new arrangement and Derryn took Ms. Cabinets application to court where it was approved. 

Working with a creditor can look something like this:

Ms. Cabinet owes South African Microlenders a total of R8 065.36 after interest has been calculated

Monthly Installments = R868.33

Interest Rate = 26.75%

Period = 1 year

Algoa Debt Counsellors contacts South African Microlenders with the following proposal:

Monthly Installment = R146.42

Interest rate = 0.00%

Period = 4 years 9 months

 

Derryn & Amanda do all of these negotiations on your behalf:

Algoa Debt Counsellors will determine new agreements like this with all the businesses that Ms. Cabinet owes money to in order to determine a new payment plan.

The new agreement looked like this:

  • Over the course of 4 years and 9 months, Ms. Cabinet will pay ONE amount of R6 420.00 (not R11 812.16) to the Payment Distribution Agent who would then pay each of her creditors. 

Ms. Cabinet made her reduced payments every month and in 2023 she was issued clearance! Ms. Cabinet is now DEBT FREE and able to live her life without the burden of debt hanging over her.

If you're interested in being Debt Free like Ms. Cabinet, reach out, we are here to help!

*Ms. Cabinet is not a real person and South African Microlenders is not a real company, but the figures above are a real example of a now Debt Free client of Algoa Debt Counsellors

Still have some Questions?

We know the process and understand that there is a lot of information to take in. To set your mind at ease, take a look at our Frequently Asked Questions at the link below, and if there is anything on your mind that you may not see an answer to, we’re here to answer any questions you may have

We'll Message You

Want to know more about the process? Send through your name and email and we’ll reach out to you