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 Ensure your family doesn’t feel the impact of your retrenchment

Retrenchment doesn’t only change the way you view yourself; it also alters the relationship between you and your family. Things can go from good to bad within a short space of time. But you can do something to prevent your family from feeling the impact of retrenchment.

Someone got injured on my property – now what?

Life is unpredictable and no matter how careful we are, accidents happen. But what if someone has an accident while visiting your house? Your guest could fall off the stairs, slip on the floor or get bitten by your dog. 

Are you ready for a house upgrade?

You moved into your home knowing one day you would need to make some changes to turn it into your dream home - add a new bedroom, a second bathroom, build a double storey or even move out.

How income protection can help you when you’re sick

Your greatest asset is probably your ability to earn an income, which provides a certain lifestyle and the capacity to take care of your dependants. That’s why it’s so important to protect your income against unforeseen illness or injury and to provide for your dependents after your death.

Deals

Baby Boom Toy Specials

Price: Available on request
When: Daily
Where: Online

Readers’ Warehouse Book Bundle Deals

Price: From R40
When: While stocks last
Where: Online

Bidorbuy Crazy Wednesdays

Price: From R1
When: Daily
Where: Online


Latest Guide

Complete guide on personal income tax