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U | ME and DEBT
An essential self help guide to what you
need to know about debt

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Content
1. What is “Debt Counselling”?
a. The definition of a debt counsellor
b. The main purpose of a debt counsellor
c. Objectives of the debt counselor | consumer | creditors
d. Documents required when visiting a Debt Counsellor if you are single or married in
Community of Property
e. How much will I pay for debt counselling?
f. What you need to know and do
g. The debt counselling process and time limits
h. What to ask when dealing with a debt counsellor
i. Debt counselling fees matrix
j. What is a clearance certificate?
2. What is an “Administration Order”?
3. Different Debt arrangements
4. What is a “Debt Consolidation Loan”?
a. Debt Counselling versus Debt Consolidation
5. Reckless credit
6. Know Your Rights
a. Repossession
b. Prescribed Debt
7. What is a “Credit Bureau”?
8. What is a “Garnishee Order”?
9. Final thoughts and tips – “How to Save”
Annexure - about motivate | today financial wellness solutions
Disclaimer:
The content of this book is intended solely for financial wellness and general financial education
information purposes. The content does not constitute nor replace any form of financial planning or
debt counselling or debt relief related advice and is not intended to be relied upon by users making (or
refraining from making) any specific financial and/or other related decisions. Appropriate independent
financial advice should be obtained before making any such financial decisions at all times.
motivate | today has used all reasonable endeavours to ensure that the information contained in this
publication is accurate, error free and up to date at the time of producing the book. However, motivate
| today cannot warrant that the information does not contain inaccuracies or typographical print errors.
Published 01.04.2013 | Formatted by Nigel Willmott CFP® | www.motivatetoday.co.za
Adapted and reproduced with kind permission: My Debt Review

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1. Debt Counselling
Definition of a Debt counsellor
A debt counsellor is anyone who is authorised by legislation to offer assistance to consumers who have
debt-related problems
“NCA sec 44 (2): A person must not offer or engage in the services of a debt counsellor in terms of this
Act, or hold themselves out to the public as being authorised to offer any such service, unless that
person is registered as such in terms of this Chapter.”
The main purpose of a Debt Counsellor is to:
 Act as a mediator between credit providers and indebted consumers.
 Assess a Consumers state of indebtedness.
 Facilitate debt re-arrangement with Credit Providers.
 Make recommendations to Credit Providers and/or Magistrates Court on behalf of over
indebted consumers.
The overall objectives for the debt counsellor are:
 Assess the full extent of the debt situation,
 Assess the consumer’s assets that may be taken into account.
 Provide a debt remedy that:
 Provides the consumer with an acceptable standard of living while repaying the debts –
this includes retaining the home and a vehicle where possible.
 Provides the consumer with an agreed, affordable and realistic monthly budget in order
to resolve the situation in the shortest possible time.
 Provides a repayment scheme acceptable to the consumer’s creditors.
 Provides a repayment plan that resolves in the shortest possible time.
 Prevents repossession of assets where possible.
 Rehabilitates the consumer without detriment for the future.
 Allows the consumer to get on with their lives.
The overall objectives for the consumer should be:
 To work honestly and openly with the debt counsellor.
 Declare all assets and liabilities – including all incomes and debts, and including bonuses and
salary increases.
 To pay the registration and mediation fees as disclosed at the first meeting.
 To keep in regular contact with the debt counsellor for the full length of the agreement.
 To agree and commit to the debt remedy – this may include surrendering credit cards, closing
accounts and realising some assets.

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The overall objectives for the creditors should be:
 To work with the debt counsellor to assist in the normalisation of the debt.
 To favourably consider the repayment proposal.
 To ensure the consumer is assisted in a fair and unbiased way throughout the
process of repayment.
 To assist the consumer to rehabilitate as soon as possible.
To assist the consumer to restore his/her credit worthiness as soon as possible
Documents required when visiting a Debt Counselor if you are single or married in COP
Before you visit the debt counsellor you will need to gather together the following documents:
 Copy of your identity document/passport.
 A copy of your most recent salary/wage slip (If you receive overtime or allowances that
are not of a regular nature then the last 6 months are required to determine an
average).
 A copy of the recent creditor statements and credit cards.
 A copy of the last two months bank statements for all your bank and investment
accounts.
 A copy of the last two months credit card statements for each of your cards.
 A copy of the latest statement reflecting your home loan balance.
A copy of your spouse/partner’s most recent salary/wage slip (if you receive overtime or
allowances that are not of a regular nature then the last 6 months’ are required to determine an
average).
Example of how much you will pay for your Debt Review
If your household net income is R10000pm and your running expense is R5000 pm and you need to
pay your creditors R8000pm.
Running
expenses
Creditors Term/
months
New Term New
installments
Food R 2000 Bond 180 R2000 240 R1600
Petrol R 1000 Car 48 R1000 60 R 750
School fees R 500 Credit card 36 R1000 48 R 500
Cell phone R 200 loan 24 R2500 39 R1400
Lights and
water
R 800 Over draft 20 R 500 36 R 250
Insurance R 500 Furniture
account
36 R1000 44 R 500
Total R5000 Total R8000 R5000
The debt counselor has reduced the interest rate, extended the term of the debt and reduced your
monthly installment.

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What the consumer needs to know and do
 Cancel your debit orders from the credit provider or do stop payments by your bank.
 Change your bank account for your salary to go into to, preferably with a bank you have no
credit agreements with.
 It is suggest that a stop order be implemented at your bank for your debt review payment
instead of debit order; a stop order is treated as cash and distributed to your creditors
immediately where as a debit order takes up to 15 days before it is distributed to your
creditors via the PDA.
 Do not skip payment on your debt review as the creditors could terminate your debt review
and take legal action.
 Always speak to your debt counselor if you have problems.
 Always answer your phone if a creditor phones you, this will prolong legal action taking
place.
 There are no payment holidays in debt counselling.
Debt Counselling process and time limits
Sec.86
(7)(b)
FORMAL/STATUTORY
PRELIMINARY
PHASE
60 DAYS
SECONDARY
PHASE
INSTRUCT
PDA
CONSENT ORDER ON
RESTRUCTURED PAYMENT
COURT ORDER ON
RESTRUCTURED PAYMENT
RESTRUCTURED PAYMENT
PDA
DEBIT ORDER and/or EAO
6
1
RECEIVE APPLICATION
(5 DAYS)
FORM 16
FORM 17.1
VERIFICATION BY CP
(10 DAYS) REG 24(4)2
DETERMINATION BY DC
(15 DAYS)
FORM 17.23
PROPOSAL TO
CP
PROPOSAL TO
MAGISTRATE’S COURT
4
ACCEPT DECLINE5
Reg.
24(2)
Reg. 24(2)&(3)
Reg.
24(4)
Reg. 24(10)
Sec. 86(7)(c) (87)?
Sec. 86(5)
Sec. 138

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Important to note
 Once under debt review you only make one monthly payment each month (Payment
distribution agency).
 No monies must be paid to debt counsellor only to a payment distribution agency.
 All debt counselling fees must be paid from the payment distribution agency – normally the
fee will be paid from the first payment.
 By going the debt-counselling route you stand a better chance down the line of getting
credit (Once paid all negative information regarding your credit record is removed).
 A good debt counsellor should be able to give you advice as to how you can cut back on
your costs.
 A consumer may elect an insurer of their own choice – home owners & vehicle cover.
 A consumer will be entitled to access their credit record at the bureau once a year in the
month of their birth free of charge (R20 thereafter).
 Claim back costs incurred when rectifying incorrect information held by the bureau.
What to ask for when dealing with a Debt Counsellor
 Ask for a copy of the NCR certificate or the NCR number.
 Phone the NCR 0860627627 to confirm if the person is still registered.
 Ask the Debt Counselor which attorneys they use and phone them.
 Ask them what is their success rate for obtaining consent orders in court.
 If you deal with a call centre always request to speak to the Debt Counsellor if they don’t
want to put you through to the debt counselor go somewhere else.
 Do not give your personal information over the phone until you know the Debt
Counsellor is legit.
 Find out if the Debt Counselor uses a Payment Distribution Agent, if not don’t use them.
 Ask for copy of your receipt or a 17.1 that you have applied for debt review.
 NCA sec 44 (2) A person must not offer or engage in the services of a debt counsellor in
terms of this Act, or hold themselves out to the public as being authorised to offer any
such service, unless that person is registered as such in terms of this Chapter.
 The two main acts to protect the consumer are National Credit Act NCA) and the
Consumer Protection Act (CPA).
 There are two sections that could apply to a Debt Counsellor in the CPA section 40 and
41.
Unconscionable conduct
“CPA sec 40. (1) A supplier or an agent of the supplier must not use physical force against a
consumer, coercion, undue influence, pressure, duress or harassment, unfair tactics or any other
similar conduct, in connection with any—
(2) In addition to any conduct contemplated in subsection (1), it is unconscionable for a supplier
knowingly to take advantage of the fact that a consumer was substantially unable to protect the
consumer’s own interests because of physical or mental disability, illiteracy, ignorance, inability
to understand the language of an agreement, or any other similar factor.”

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False, misleading or deceptive representations
“CPA sec41. (1) In relation to the marketing of any goods or services, the supplier must not, by
words or conduct—
(a) directly or indirectly express or imply a false, misleading or deceptive representation
concerning a material fact to a consumer;”
Debt Counselling Fees matrix
Debt Counselling Fee Guidelines Approved Fees
1. A Debt Counsellor may receive the following fees in respect of
consumers who have applied for debt counselling:
1.1. An application fee, limited to the amount prescribed in terms of
Schedule 2 (2) of the Act, recoverable directly from the consumer upon
receiving an application for debt review;
R50
1.2. A rejection fee of R300.00 (excluding VAT) in respect of consumers
whose applications have been rejected in terms of section 86(7)(a);
R300 (excl vat)
1.3. A restructuring fee of the lesser of the first installment of the debt
re-arrangement plan in respect of a consumer whose applications have
been accepted in terms of 86(7) (b) or 86(7) (c).
 Maximum allowable fee for a Single Application (Once off) R6000 (excl vat)
 Joint Application (Once off) R6000 (excl vat)
1.3.1. 100% of the fee is payable at the first installment. Yes
1.4. Should a Debt Counsellor fail to submit proposals to Credit
Providers or refer the matter to a Tribunal or a Magistrate Court within
60 business days from date of the debt review application the Debt
Counsellor has to refund 100% of the fee paid by the consumer
(excluding the application fee).
100%
1.5. A monthly after-care fee payable to the DC 5% up to a max of R400 (excl
VAT) for the first 24 months,
thereafter reducing to 3% to
a max of R400 (excl VAT).
1.5.1. Payment of the monthly after-care fee is to commence in the 2nd
month after the amount in 1.3.1 above has been paid.
Yes
1.6. Should the consumer withdraw from the process after completing
stages 1.3 above, a fee equal to 75% of the restructuring fee as per 1.3
above is payable by the consumer.
Yes

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What is a Clearance certificate?
A consumer who has settled all his/her debts in terms of a debt restructuring must receive a Clearance
Certificate from the Debt Counsellor. This certificate will allow the consumer to have his/her credit
record that is held by a credit bureau, cleared. Should a Debt Counsellor refuse to give the consumer the
certificate he/she can approach the tribunal to review the decision of the Debt Counsellor.
2. What is an administration order?
When someone is in financial trouble and does not qualify for debt counseling, the only option left to
them is the administration order route. It applies to persons who have a total debt of less than
R 50,000.The administrator approaches all of the creditors with a debt repayment plan or proposal after
the administrator has reviewed the client’s income and expenses. Determination must be made for the
client to still have the means to live. An application is made to court, an administrator is appointed and
the administrator takes over the management of the person’s debt. An Emolument Attachment Order is
granted alongside the Administration Order so as to garnishee the client’s salary/ wage for the monthly
disbursement amount. The administrator will receive the funds from the employer monthly and will
distribute the funds to the creditors on a three monthly basis. There are certain costs by which the
government controls administrator costs; however the administrator may charge additional fees to
cover expenses. The administrator must resubmit a distribution statement to the court every three
months. The distribution statement will detail the creditors, the individual distribution amount and the
balance of the accounts with each creditor.
What are the issues?
The administrator may not always have the most recent creditor updates, which means that the client
may think that they owe more, when in fact they owe less. The law states that the initial creditors that
were presented in the original application must be paid up before the addition of new creditors to the
order. This prevents the original distribution amount being spread too thinly between the initial
creditors and the new creditors. However, this is not the case and extends the debt recovery process.
The payments to creditors are not made regularly and so creditors may issue an Emolument Attachment
Order of their own for the debt even though the debt is under administration. Administrators may
change but neither the client nor the creditors may have been informed. Although initially cheaper than
debt counseling, the cost may escalate as the administrators claim expenses. There is no controlling
body for administrators

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3. Different Debt Arrangements (table from NDMA)
Voluntary
arrangements Administration
Debt mediation
(DM)
Debt counselling
(DC)
Voluntary
Sequestration
Forced
Sequestration
Will it get noted on
my credit record
Not necessarily. Yes Yes Yes Yes Yes
If yes, for how long? Until all your debts
are paid off.
Until all your debts
are paid off. Then a
clearance certificate
will be issued
Until all your debts
are paid off. Then a
clearance certificate
will be issued
Until you apply for a
rehabilitation order
(usually 3 to 10
years)
Depends on your
situation.
Do I pay for the
solution?
No Yes. The fees are
extravagant
therefore this
solution is to be
avoided
Yes, debt mediators
charge for this
solution
Yes, debt
counsellors charge
an upfront fee and
an after care fee
Yes To a degree
For whom would
this solution be
suitable?
If you have a short-
term cash flow
problem
Clients with total
debts of less than
R50 000 and no
other solution solves
the problem.
Clients who are not
that over-indebted.
We are working to
expand this solution
Clients who are up
to 50% over-
indebted.
Clients who can
offer credit
providers around
20c of every Rand
and who have ten to
twenty thousand
Rand available for
legal fees
Clients who are
completely insolvent
and who can’t offer
the credit provider
any funds.
Can I get more
credit?
Yes No No No No No
Will I have to sell
my house / assets
Not necessarily Depends on your
situation but not
necessarily
Depends on your
situation but not
necessarily
Yes, all your assets
will be realised
Yes, all your assets
will be realised
4. Debt Consolidation Loan
A major appeal of consolidation loans is convenience. Instead of paying 20 different creditors who are
charging different rates at different times of the month, you take out one big loan and pay off all those
accounts. Then you make a single payment on that loan once a month. But ease doesn't automatically
translate to savings.
Before you sign on the dotted line, be sure that the costs of the new, bundled loan will truly be less than
what you're already paying various creditors. For many consolidation-loan candidates, their current
credit woes mean they won't get the lowest-available interest rate. Plus, when there is nothing to
secure the loan (such as your home), expect the lender to bump up the rate. Calculate interest and fees
on all your existing accounts to determine the total of the payments you now make. Then compare
those amounts with the consolidation loan numbers to make sure it truly is a better choice.

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Debt Counselling Versus Loan Consolidation
Debt Counselling Loan Consolidation
Using your own money to settle debt Credit provider giving you a loan to settle your
debt
Debt counselor may reduce the interest on your
account to solve the debt as quick as possible
The credit provider is more interested to settle the
debt on high interest
The debt under debt review will be shorter The consolidation loan will be a new loan as you
will be paying interest on interest and the term
will be longer
The Debt Counsellor uses the Induplum rule to
solve the debt
The credit providers do not liaise the credit
providers nor do they bring in the induplum rule
You will be listed on the credit bureaus but when
the debt is settled the debt counselor will provide
you with a clearance certificate
You won’t be listed but puts you in danger for
more loans
Debt counselor will assist you with reckless credit The credit provider will just settle the debt and not
worry about the reckless loan
Induplum Rule
Despite any provision of the common law or a credit agreement to the contrary, the amounts
contemplated in s 101(1) (b) to (g) that accrue during the time that a consumer is in default under the
credit agreement may not, in aggregate, exceed the unpaid balance of the principal debt under that
credit agreement as at the time that the default occurs.
Once the amounts referred to in s101(1)(b) – (g) that accrue during the period of default, whether or not
they are paid, equal in aggregate the unpaid balance of the principal debt at the time the default occurs,
no further charges may be levied.
Section 101 – Interest, initiation fee, service fee, credit insurance, default administration charges, and
collection costs.
Example
When a consumer takes a loan of R10000 from a credit provider and defaults when the balance is
R8000 (default), interest and costs added to the account cannot be more than R16000.

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5. Reckless Credit
The National Credit Act requires that a credit provider must carry out a financial assessment to
determine the extent or amount of credit that a credit applicant can afford before entering into a credit
agreement with the applicant. In performing an affordability assessment, a credit provider must
determine and take into account the following:
 whether the applicant has a general understanding and appreciation of the risks and costs of the
proposed credit, and of the rights and obligations of a consumer under a credit agreement;
 the applicant’s debt repayment history;
 the applicant’s existing financial means, prospects and obligations; and
 whether the new credit agreement will cause the customer to become over-indebted.
If a credit provider fails to do an affordability assessment before advancing credit to someone, the credit
provider could be guilty of entering into a reckless credit agreement.
If an agreement is declared reckless it may be fully or partially unenforceable, and the credit provider
may lose all or part of the money advanced. The Courts may set aside all or some of the consumer’s
obligations to repay the debt under the reckless agreement.
NCA 81 (2) Prevention of reckless credit
“A credit provider must not enter into a credit agreement without first taking reasonable steps to assess-
(a) the proposed consumer’s-
I. general understanding and appreciation of the risks and costs of the proposed credit, and of the
rights and obligations of a consumer under a credit agreement;
II. debt re-payment history as a consumer under credit agreements (Example: National loan
register (NLR), Credit bureau checks)”
6. Know your rights
Repossessions
A debt collector does not do repossessions they get you to sign a voluntary surrender for your goods,
furniture, motor vehicle. Only a sheriff can do repossessions with a court order. The sheriff has to
display his badge. Most debt collectors act like sheriffs and threaten consumers, this is against the law.
Most times furniture stores give you a loan instead of a HP agreement so how can they send a sheriff or
debt collector to pick up your goods on a loan agreement?
The debt collector
Request the “Council of Debt Collectors” certification and identification from the debt collector and his
employer.

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Council of Debt Collectors Act
“To provide for the establishment of a council, known as the Council for Debt Collectors; to provide for
the exercise of control over the occupation of debt collector; to amend the Magistrates' Courts Act, 1944,
so as to legalise the recovery of fees or remuneration by registered debt collectors; and to provide for
matters connected therewith.”
Improper conduct by debt collectors
“15. (1) A debt collector may be found guilty by the Council of improper conduct if he or she, or a person
for whom he or she is vicariously liable (a) uses force or threatens to use force against a debtor or any
other person with whom the debtor has family ties or a familial or personal relationship;
(b) acts towards a debtor or any other person with whom the debtor has family ties or a familial or
personal relationship, in an excessive or intimidating manner;
(c) makes use of fraudulent or misleading representations, including
(i) the simulation of legal procedures;
(ii) the use of simulated official or legal documents;
(iii) representation as a police officer, sheriff, officer of court or any similar person; or
(iv) the making of unjustified threats to enforce rights;
(d) is convicted of an offence of which violence, dishonesty, extortion or intimidation is an element;
(e) spreads or threatens to spread false information concerning the creditworthiness of a debtor;
(f) contravenes or fails to comply with a provision of the code of conduct contemplated in section 14;”
You can lodge a complaint with the Council of Debt Collectors or the Consumer Affairs Board using the
CPA.
Prescribed Debt
D. 3 YEAR PRESCRIPTION PERIOD APPLIES TO:
In short, according to the Prescription Act, if, in the past three years you have not made any payment
towards settling a debt, acknowledged owing the debt in any way – including over the phone – agreed
to pay it, or been summonsed in respect of it, it has prescribed, and you can raise this as a defense when
asked to pay it. NOT ALL DEBT PRESCIBES IN THREE YEARS.
In respect of any other debt, save where an Act of Parliament provides otherwise.
A number of debt collectors and law firms make a living out of buying up ‘debt books’ – debts which
companies have written off – and then intimidating the debtors into paying the money, plus whopping
interest and lawyer’s charges, of course. They rely on the debtors not realising that in terms of the law,
debts older than three years have prescribed. Creditors only have three years in which to serve
summons on you.

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In many cases these debts are purchased on spreadsheets with no copies of any agreements - meaning
that there is actually no proof at all of what you owe or that you owe anything at all.
1. When buying these debts, they list it on Credit bureaus.
2. Debt values are grossly inflated in some cases and interest is charged on interest.
3. You have more than one judgment for the same debt.
4. They use unregistered debt collectors to sign blank documents (sec57/58) consent to judgment.
5. A lot of the debt collectors are not even registered with the council of debt collectors.
6. A debt collector who buys books will have other registered debt collectors on the panel that will
then roll the book from one debt collector to the other.
7. We have come across debt collectors receiving trace packs for the amount to be collected but
they will inflate the account for their own personal gain.
8. They may not list you for old prescribed debts in order to "force" you to pay them.
9. They may not inflate debt values and then use intimidating / harassing tactics to force debtors
to pay – Consumers must not sign any acknowledgments –first check it - you might not have to
pay it.
10. Well, what consumers must do is acknowledge the debt – not without first asking for a
statement detailing the amount allegedly owing, plus every fee and interest charge. (This is your
right in terms of the Promotion of Access to Information Act, so don’t be fobbed off).
11. The consumer must send the debt collector a letter stating this, saying that if he does not
receive a response within seven days, the matter will be considered closed.
12. The consumer must keep a copy of the letter because it might be needed if he ever gets
summonsed to court over that debt, or gets approached by another debt collector about the
same debt.
13. Many of these debt collectors will slot in the prescribed debt into Administration orders, Debt
Counselling or have a debt order going off the clients account without the client’s
authorization.
In terms of the Prescription Act:
A. 30 YEAR PRESCRIPTION PERIOD APPLIES TO:
1. Any debt secured by a mortgage bond.
2. Any judgment debt.
3. Any debt in respect of taxation imposed or levied by or any other law (Municipal rates are a form of
taxation, as are TV licenses and traffic fines).
4. Certain debts owed to the state.
B. 15 YEAR PRESCRIPTION PERIOD APPLIES TO:
Certain debts owed to the state.

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C. 6 YEAR PRESCRIPTION PERIOD APPLIES TO:
In respect of debt arising from a bill of exchange or other negotiable instrument or from a notarial
contract.
Requesting of documents
“NCA (65). Right to receive documents
i. 2(a)make the document available to the consumer through one or more of the following
mechanisms-(i) in person at the business premises of the credit provider, or at any other
location designated by the consumer but at the consumer’s expense, or by ordinary mail;
by fax, by email or by printable web-page
ii. Or deliver it to the consumer in the manner chosen by the consumer from the options
made available in terms of paragraph (a).
iii. A credit provider must not charge a fee for the original copy of any document required to
be delivered to a consumer in terms of this Act.”
Documents to ask for:
 Copy of the original contract.
 Copy of the different insurance contract.
 Breakdown statement with all the charges and interest.
 The date and amount you have defaulted on an agreement (to establish the Induplum rule).
 Request a copy of all documents from the debt collector or an attorney and lodge a dispute on
the account to stop legal action taking place.
 Query you credit bureau states and lodge a complaint with the NCR if you are not happy about
your status.
“NCA sec 70 (c): take reasonable steps to verify the accuracy of any consumer credit information
reported to it;”
7. Credit Bureau
What is a credit bureau?
A credit bureau is a company that gathers information and updates each consumer’s credit history. A
credit bureau creates a record of a consumer’s credit information indicating how the consumer manages
his/her credit. The credit bureau supplies these records to credit providers, such as banks, retailers and
other credit providing companies. The information indicates each consumer’s payment record. It is also
used to detect fraud, corruption or theft.
When I apply for credit from a credit provider, who decides whether or not I qualify for credit? When
you apply for credit, the credit provider uses information received from a credit bureau to assess your

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application. When your credit record satisfies the standards of the credit provider, a decision to grant
you credit is made by the credit provider. It is the bank, retailer or credit provider that approves or
rejects the credit application and not the credit bureau.
What does the Act do?
The Act stipulates that each credit bureau must register with the National Credit Regulator in order to
conduct business legally; It sets out the purposes for which consumer credit information may be used,
and the companies to which the credit bureau may provide the information; It sets out standards for
data accuracy to ensure that information kept by a credit bureau on your record is always accurate; It
ensures that each consumer has the right to check his or her record, and that any mistakes are
corrected.
What rights do I have?
You have the right: to be informed that the credit provider intends to report negative information on
you to a credit bureau before the credit provider actually reports you; to receive a copy of your credit
record from a credit bureau when you request it. You can get one free record per year, but the credit
bureau may charge you a fee for any further records; to challenge information kept by the credit bureau
if you are unhappy with the information; for your information to be kept confidential, and for your
information to be used only for purposes allowed by the Act.
Credit bureau may not list information that may be discriminatory such as information on race,
sexuality, political affiliation, medical status, religion or membership with a trade union.
What can my credit information be used for?
Your credit information can be used: To assess whether or not you can afford credit; To investigate
fraud, corruption or theft; To consider you for employment in a position that requires trust and honesty
and entails the handling of cash or finances; and To assess whether or not you can afford various
services.
Credit information assists credit providers to assess if consumers will be able to meet their financial
obligations. Credit information is of benefit to consumers who are not over indebted and have good
payment histories. Credit information assists such consumers to get credit, and prevents them from
becoming over-indebted. (Reckless credit NCA 81 (2) Prevention of reckless credit).
How can I get a copy of my credit record?
You can request your credit record from a credit bureau once a year at no charge, thereafter at a fee of
not more than R20 per record.
Will I be notified before the information is sent to the bureau?
For the following information, you will receive 20 business days notice before a credit provider submits
your information to a credit bureau. During this period, you must inform the credit provider or credit
bureau if the information is incorrect: classifications of consumer behavior, such as ‘delinquent’,

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‘default’, ‘slow paying’, ‘absconded’ or ‘not contactable’; classifications related to enforcement action
taken by the credit provider, such as handed over for collection or recovery, legal action, or write-off.
How can I verify that the information held by credit bureau is accurate?
You can verify that the information held by a credit bureau is correct by following the steps below:
Contact the credit bureau; Ensure that you have your accurate personal information such as your ID
number and your address; The bureau will send you a form to complete; Complete the form and fax it to
the bureau; The credit bureau may ask you to pay a fee; this must not exceed R20; Inform the bureau if
there is any inaccurate information on your record, or ask the bureau to explain any information where
you are uncertain.
Can I challenge information kept by credit bureau if I don’t agree with it?
YES! If you do not agree with the information held by the credit bureau, you can challenge this and
request the bureau to correct the information. If they refuse to correct the information, you can
complain to the National Credit Regulator. The Office of the Credit Information Ombud: The office of the
Credit Information Ombud resolves complaints from consumers and businesses that are negatively
impacted by credit information.
8. What is a Garnishee order
The proper wording is an Emolument attachment order (E.A.O). There are two ways of getting an E.A.O
on your salary, either by means of summons or by a debt collector getting you to sign consent to
judgment known as section 57/58. If it was with a summons, the credit provider would have handed
your debt over to an attorney. The attorney would then have contacted you to try and make an
arrangement with you to pay the account. The attorney is mandated to except the offer or proceed with
legal action. If the consumer/debtor refuses to correspond with the attorney then they will serve a
summons onto the debt/consumer by means of the sheriff. The debt/consumer has 10 working days to
respond to the summons. If the consumer /debtor does not respond, then the attorney will apply to
court for a judgment. When the judgment gets granted, the sheriff will then serve the E.A.O on the
employer for deductions from the employee’s salary.
The 57/58 normally gets used by the debt collectors and attorneys as this is a much easier and cheaper
way to get E.A.O granted through court. This is one of the areas where the consumer must be very
careful.
Here are some dos and do nots:
1. Ask the debt collector for his council of debt collector certificate.
2. Always look at the installment and if you are not happy with it, cross it out and put in an
installment you know you can afford.
3. Do not be threaten by debt collector you do have rights.
4. Always take his name, ID number and telephone number and use your phone to record your
conversation and take a photo of the debt collector.
5. Do not sign the forms if you are not sure as to what you are signing.

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6. About one third of the debt has gone into a prescribed debt status.
The following problems government employees are facing with garnishee orders:
1. You never signed the section E.A.O.
2. No witnesses were present when the E.A.O was signed.
3. You signed for prescribed debt.
4. Debt was inflated.
5. Debt collectors not registered.
6. Using the incorrect court to enforce E.A.O.
7. E.A.O not served correctly on the employer.
8. The employee never received a section 129 notice.
9. Debt exceeding the Induplum rule.
10. Incorrect Persal number being used.
11. Debt collectors acting as sheriffs as some of the files never went through court.
12. Loan companies inflating balances before handover to collectors.
Question to be asked:
The following information needs to be provided to do a proper assessment:
 Original contract.
 Copy of amount that was transferred into the bank account.
 The amount of credit granted.
 The interest rate.
 Copy of the section 57/58.
 Breakdown statement of all transactions from credit provider.
 Breakdown statement from debt collector or attorneys setting out all fees and costs.
 The copy of the credit report and the date when assessment was done.
1. Ask for original contract of loan or agreement:
Asking for the original agreement will assist in the following:
 Type of agreement: loan, Hp, bond, lease, rental.
 To establish the cause of action.
 How the interest rate was calculated.
 Ask for the voice recording if the loan was done by a call center.
 To view the fees, credit life, home owners insurance and all hidden cost.
NCA (65). Right to receive documents
iv. “2(a)make the document available to the consumer through one or more of the
following mechanisms-(i) in person at the business premises of the credit provider, or at

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any other location designated by the consumer but at the consumer’s expense, or by
ordinary mail; by fax, by email or by printable web-page
v. Or deliver it to the consumer in the manner chosen by the consumer from the options
made available in terms of paragraph (a).
vi. A credit provider must not charge a fee for the original copy of any document required to
be delivered to a consumer in terms of this Act.”
NCA (66) Protection of consumer credit right
I. “A credit provider must not, in response to a consumer exercising, asserting or seeking to
uphold any right set out in this Act or in a credit agreement
II. OR discriminate directly or indirectly against the consumer, compared to the credit
provider’s treatment of any other consumer who has not exercised, asserted or sought to
uphold such a right, penalise the consumer, alter, or propose to alter, the terms or
conditions of a credit agreement with the consumer, to the detriment of the consumer or
take any action to accelerate, enforce, suspend or terminate a credit agreement with the
consumer.”
Magistrate court act Section 65J (4) (b) provides for the garnishee or debtor to obtain a statement free
of charge.
i. “(b) The judgment creditor or his or her attorney shall, at the reasonable request of the
garnishee or the judgment debtor, furnish him or her free of charge with a statement
containing particulars of payments received up to the date concerned and the balance
owing.”
2. Affordability must be done when taking out a loan
NCA 81 (2) Prevention of reckless credit
“A credit provider must not enter into a credit agreement without first taking reasonable steps to assess-
(a) the proposed consumer’s-
III. general understanding and appreciation of the risks and costs of the proposed credit, and of the
rights and obligations of a consumer under a credit agreement;
IV. debt re-payment history as a consumer under credit agreements (Example: National loan
register (NLR), Credit bureau checks”
NCA Rule 4 (3) Consent to Judgment
“In order that a consent to judgment to be valid, the consent must be signed by the respondent and
WITNESSED by two independent witnesses.

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Consent to judgment in terms of section 58 of the Act shall be signed by the debtor and by two witnesses
whose names shall be stated in full and whose addresses and telephone numbers shall also be
recorded. When a consumer alleges that he has no knowledge of the judgment then the witnesses can
be contacted to aver that they were indeed present when he signed the consent. If they were not then
the judgment may be rescinded.”
When the section 57/58 is completed, the debt collector or attorney needs to do an affordability study
to see if the consumer can afford the E.A.O installment.
3. Copy of statement
This will assist you to establish the following:
 The date the account went into a default status
 The hand over amount when the account was handed over to a debt collector or attorney
 Fees and costs charge by the attorneys and debt collectors. They have to follow the rules set
out by the debt collectors council and law society
 Has the account exceeded the induplum rule SECTION 103 (5) OF THE NCA
Despite any provision of the common law or a credit agreement to the contrary, the amounts
contemplated in s 101(1) (b) to (g) that accrue during the time that a consumer is in default under the
credit agreement may not, in aggregate, exceed the unpaid balance of the principal debt under that
credit agreement as at the time that the default occurs.
Once the amounts referred to in s101(1)(b) – (g) that accrue during the period of default, whether or not
they are paid, equal in aggregate the unpaid balance of the principal debt at the time the default occurs,
no further charges may be levied.
Section 101 – Interest, initiation fee, service fee, credit insurance, default administration charges, and
collection costs.
Example
When a consumer takes a loan of R10, 000 from a credit provider and defaults when the balance is R8,
000 (default), interest and costs added to the account cannot be more than R16, 000.
Section Mag 65J (4) (b) provides for the garnishee or debtor to obtain a statement free of charge.
“(b) The judgment creditor or his or her attorney shall, at the reasonable request of the garnishee or the
judgment debtor, furnish him or her free of charge with a statement containing particulars of payments
received up to the date concerned and the balance owing.”
Section 106B of the Magistrate’s Court Act 32 of 1944 provides further:
“… any employer who, having been requested by an employee to furnish a written statement
containing full particulars of such employee’s emoluments, fails or neglects to do so within a

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reasonable time, or who willfully or negligently furnishes incorrect relevant particulars shall be guilty of
an offence and on conviction liable to a fine not exceeding R300 or, in default of payment, to
imprisonment for a period not exceeding three months.”
4. Request a copy of the section 57/58 which the debtor has signed
 Upon receipt of a letter of demand or summons claiming an outstanding debt, the defendant
may give an unconditional written consent for judgment in favour of the judgment creditor. This
is known as a section 58 procedure (Magistrate’s Court Act 32 of 1944).
This will allow to establish following
 Jurisdiction of the court
In terms of section MCA 65J (1), a judgment creditor may issue an emoluments attachment order in the
district where the employer of the judgment debtor resides, carries on business or is employed.
NCA of section 90 (2) (k) (vi) (bb)
Previously the question of jurisdiction was easily provided for by ensuring the debtor consented to the
jurisdiction of the appropriate court. This is no longer the case. The NCA makes specific provision
to limit the choice of jurisdiction. Section 45 of the Magistrates’ Courts Act is specifically excluded and
jurisdiction is limited in terms of section 90 (2) (k) (vi) (bb) to “the court where the consumer resides
or works or where the goods in question are ordinarily kept”.
Furthermore sec 90(2) (k) (vi) (aa) prohibits any credit agreement containing a clause consenting to
the jurisdiction of the high court if the magistrate’s court has concurrent jurisdiction. The opposite
provision is not precluded as the NCA attempts to decrease the costs arising from the collection process.
 Witnesses
In order that a consent to judgment to be valid, the consent must be signed by the respondent and
WITNESSED by two independent witnesses.
Consent to judgment in terms of section 58 of the Act shall be signed by the debtor and by two witnesses
whose names shall be stated in full and whose addresses and telephone numbers shall also be
recorded. When a consumer alleges that he has no knowledge of the judgment then the witnesses can
be contacted to aver that they were indeed present when he signed the consent. If they were not then
the judgment may be rescinded.
 The debt collector
Request the “Council of Debt Collectors” certificate and identification from the debt collector and their
employer.

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(Council of Debt Collectors Act)
To provide for the establishment of a council, known as the Council for Debt Collectors; to provide for
the exercise of control over the occupation of debt collector; to amend the Magistrates' Courts Act,
1944, so as to legalise the recovery of fees or remuneration by registered debt collectors; and to
provide for matters connected therewith.
Improper conduct by debt collectors
15. (1) A debt collector may be found guilty by the Council of improper conduct if he or she, or a person
for whom he or she is vicariously liable (a) uses force or threatens to use force against a debtor or any
other person with whom the debtor has family ties or a familial or personal relationship;
(b) acts towards a debtor or any other person with whom the debtor has family ties or a familial or
personal relationship, in an excessive or intimidating manner;
(c) makes use of fraudulent or misleading representations, including;
(i) the simulation of legal procedures;
(ii) the use of simulated official or legal documents;
(iii) representation as a police officer, sheriff, officer of court or any similar person; or
(iv) the making of unjustified threats to enforce rights;
(d) is convicted of an offence of which violence, dishonesty, extortion or intimidation is an element;
(e) spreads or threatens to spread false information concerning the creditworthiness of a debtor;
(f) contravenes or fails to comply with a provision of the code of conduct contemplated in section 14;
9. Final thoughts and tips – “How to save money”
Set Your Own Personal Budget
These clever tips help keep your cash where it belongs -- in your pocket! First things first: Learn how to
set your own personal budget with our easy-to-use budget planners [see the website for our range of
personal budget planners].
 Get organized: Gather all important financially-related documents to a central location that is
equally accessible to both partners.
 Track your spending and pay yourself first: Write down where you are spending your money.
Re-route some of your spending to a savings account: pay yourself first for a secure financial
future.
 Plan to save: Start a savings account to cover expenses like clothes, Christmas/holidays, and
insurance. Plan for future expenses throughout the year. Complete a retirement planning
worksheet.
 Build an emergency fund: You never know when you will need additional cash so try to have two
to three months of living expenses in a readily accessible savings account or money market
account.
 Don’t Go into Debt, and if you are, Get out of debt. If you must use a credit card, control your
credit card spending and try to pay off any debts you have (e.g., car, credit card, student loan,

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etc.). Pay more than the minimum monthly payment. Once you have paid off your debts/credit
cards, take the money and put it towards savings or some other debt. If possible, the goal is to
simultaneously pay off your debt while still putting some amount into savings. Remember, you
are loaned money so that you will pay interest and late charges and make other people money.
 Set goals: Decide what you want to do with your money. Do you want to pay off debts/student
loans? Buy a house? Save for a new car or additional education? Write down your goals and
your strategy for achieving these goals. Write a budget.
 Review your insurance coverage: Every year, review your health, life, disability,
renter/homeowners, auto, and personal liability policies to make sure you are both adequately
covered.
 How much should you save and/or invest? Save at least 15% of every dime you earn beginning
with your first job. The older you are the higher the percentage has to go unless you think you
can work forever!
 Try take-out once a month instead of dining out.
 Rent a video instead of going to the movies. If you really want to go to the movies, go to the
less expensive afternoon “matinee.”
 Or better yet, go to your local library and borrow books, CDs, videos, and read the latest
magazines and newspapers.
 Bring your lunch to work once or twice a week instead of buying it.
 Don’t grocery shop on an empty stomach or you may end up buying more than you need.
 Cut down food costs by buying what you need on sale, buying generic brands, buying in bulk,
and shopping at discount outlets.
 Don’t buy a sale item or use a coupon just for the sake of it being “cheaper.” Buy an item only if
you need it! Shop with a list.
 Increase your gas mileage by taking care of your car with schedule check-ups, or just drive less.
Consider carpooling, walking, taking the bus or metro, or riding your bike.
 Cancel your satellite rental (or at least the premium channels), as well as subscriptions to
magazines and newspapers.
 Exercise at home rather than joining a gym.
 Make your own coffee at home rather than buying from a store, or at least cut down the
number of times per week you purchase coffee.
 Track your spending and cash – know where every Rand goes!
 Organize a friend/relative/neighbor swap of clothes, toys, furniture, CDs, etc.
 Buy clothes for next year at the end-of-season sales – try garage sales and thrift stores.
 Find a simple hairstyle that doesn’t cost too much to take care of on daily/weekly basis.
 Take advantage of free entertainment in your community – parks, museums, exhibits, etc. Go to
free park concerts and other community activities.
 Try to buy with cash, checks, or debit cards. If you use credit cards, get rid of all but one or two,
and pay off the balance each month. You can save hundreds or thousands of Rands a year by
avoiding credit card interest charges.
 Always do your grocery shopping with a list of items you need -- and don't buy anything that's
not on the list. You can save hundreds of Rands a year by avoiding impulse food purchases.
 Compare unit prices on labels when shopping (for example, price per ounce). You can save
hundreds of Rands a year by purchasing items with the lowest price per unit.
 Avoid shopping at convenience stores. You pay for the convenience -- the prices are usually
higher than grocery stores.

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