Debt rehabilitation


Frequently asked questions

There is a common misunderstanding in relation to what is commonly known as a “CONSOLIDATION” as opposed to the Debt Restructuring mechanisms that we employ in assisting our valued clients. A Consolidation as it currently applies largely in the South African Credit Industry, is in essence a LOAN whereby a credit provider will settle all or a portion of your existing debt (and in some instances, lend and advance to you a further sum of money) and you then re-pay that credit provider the amount that they have used to settle your debt (and any additional loan amount) together with interest thereon, initiation fees, administration charges, credit life insurance and VAT. The persuasion towards this “Consolidation” lies in the fact that you feel that your creditors are now paid in full and you are only liable for one installment every month/week as opposed to paying three, four or more different creditors individually. The reality is however, that by taking on a “Consolidation Loan” (which in effect is what it is), you have basically just doubled your debt because you are paying interest and costs on the lump sum borrowed to settle your initial debt to the Consolidator. In a nutshell, you’re paying interest on interest and you must bear in mind that the Consolidator probably obtained a discount from your initial creditors because they would have requested settlement balances and negotiated discounted settlements. This discount is not passed on to you the Consumer. If anything, this puts you in a worse financial position than if you had restructured your payments to your initial creditors in the first place. Debt Restructuring on the other hand assists you by reducing your monthly/weekly repayments to your creditors and reducing interest rates on all your existing obligations. In most instances you even get a cheaper credit life policy to cover your debt in the event of death or retrenchment. The savings you enjoy by Restructuring your Debt are massive and give you a much greater chance of breaking free from the Debt Trap much sooner than you ever would by traveling the bumpy road of Consolidation Loans.
Ideally, we try to assist all our clients in getting rid of their debt within a 60 month period. However, it must be noted that in certain cases, due to affordability constraints, it may take longer. Ultimately, good restructuring allows a client an opportunity to breathe easier and sleep better by placing emphasis on affordability and ensuring that a client has sufficient funds to take care of themselves and their families by providing for their basic living needs whilst servicing their debt at the same time, just at a reduced rate. It is important to note that a Consumer holds the key to reducing or extending the period during which they undergo Debt Restructure. How you may ask!! Well, you as the Consumer have within you the gift of self-discipline. You could pay a portion of your annual and/or other bonuses towards your debt. You could open a separate savings facility and save a little every month so that at the end of 12 months, you could look at what you’ve accumulated and use it to settle some of your debt. (Even R100 saved a month means that at the end of a year, you could pay a minimum of R1200, besides the interest accumulated on your savings, towards payment of your debt.) All these and other little practices of self discipline help to reduce the period that you undergo the restructure process.
In the case of an Administration Order, once your debt has been settled in full, your Administrator issues a certificate of completion. This certificate is issued in terms of section 74U of the Magistrates Court Act and is endorsed by the Clerk of the Magistrates Court. A copy is then given to you the consumer and a copy is sent to the Credit Bureaus to update their records thus clearing you to re-enter the credit market, except that this time you will have the benefit of understanding the importance of not falling into the Debt Trap again. The process is similar once you have completed the Debt Review process. Your Debt Counselor issues what is known as a Form 19 Clearance Certificate in terms of section 71 of the National Credit Act. You the Consumer are provided with a copy as well as the National Credit Regulator and the Credit Bureaus. Any record of your Debt Review is then expunged and you are Debt-Free again.

Our programs

Debt Rehabilitation

D&R Incorporated offers 2 debt rehabilitation programs, Debt Review and Administration order. Both of these programs are designed to help you pay off your debt while enjoying legal protection from your creditors.
Each program offers one installment for all of your debt which gives you more money in your pocket every month.

Debt Review

Administration order