Guiding consumers since 2009

What is the difference between debt counselling and debt administration

By Staff Writer

 

Debt counselling and debt administration are both ways in which consumers can reduce their debt, but it’s easy to get confused between debt counselling and debt administration so let’s take a look at the differences between the two.

Debt counselling: the idea with debt counselling/debt management is to help consumers reduce their debts and come to an agreement with their creditors in a cost effective way.

Debt administration:  Under debt administration, the distribution of payment happens through lawyers and it can only commence once all their fees have been paid for. In some cases, it can take as long as a year before your creditors actually start receiving payment.

Debt counselling:  Any amount of debt can be dealt with and handled when under debt counselling.

Debt administration:  If you want to opt for debt administration, your debt cannot exceed R50 000.

Debt administration is a formal agreement with creditors done through the court and it usually stretches over a period of five years. During this time your creditors are not allowed to  get repossession or attachment orders against .

You can make use of debt administration to get rid of garnishee orders, but it will be replaced by one garnishee order.

Unlike with debt counselling, you cannot apply for debt administration if you have any assets that can be sold in order to repay debt. 

 If you are struggling with debt, then debt management is usually your first port of call. However, it is best to discuss your specific situation with a debt expert in order to establish what the best way to proceed in your specific situation is.

Recent Articles

Featured Fuel rewards programme – how to fill up on petrol and points

South Africa’s volatile economy has often meant that factors like the fuel price bear the brunt. This year alone the country’s fuel price has fluctuated by between R1.50 to almost R3, which has put increasing pressure on motorists. That said, many of the bigger South African brands have provided some relief by way of fuel rewards programmes.

Are you entitled to your spouse’s pension after divorce?

Divorce means more than just parting ways with your partner. It may also involve parting ways with your assets. The Divorce Act states that your retirement fund forms part of your assets. This means that it will be considered when dividing up your assets.

Retrenched – which payments are you entitled to?

In the current struggling economic climate, retrenchments are a regular occurrence and not everyone survives the cut. If you find yourself on the receiving end of retrenchment you may have questions about the payments that are due to you.

Do you want to settle your debt?

You may be considering settling your credit account, whether it’s a credit card or various store accounts, now may be as good a time as any. This especially if you have saved, or you received a tax return or salary bonus. 

Deals

Builders Black Friday Special

Price: R5000
When: Until 29 November 2019
Where: Online

Café Rousse Monday Special

Price: Available on request
When: Mondays
Where: Nationwide

Skye Bar Mojito Special

Price: R55
When: Until 31 December 2019
Where: Johannesburg