DC DEBT CLEAR (PTY) LTD

Author: Cameron Nel

  • What debt is the most important to pay off first?

    What debt is the most important to pay off first?

    When it comes to paying off debt, knowing which debts to prioritise and pay off first can save you the extra money in accumulating interest and get you closer to eliminating another of those monthly instalment burdens.

    There are various ways to get rid of debt, and in this blog, we look at which debts you should pay off first.

    Should you pay the secured debt or unsecured debt first?

    A good rule of thumb is to pay off debts according to the interest rate, starting with the loan with the highest interest rate, because a high-interest loan will add more interest to your balance as time goes by.

    Types of unsecured debt, usually consumer debts, personal loan or credit card debt, have a higher interest rate than secured debt. Secured debt examples include your monthly home mortgage or vehicle instalment.

    Considering unsecured debt versus secured debt, paying off unsecured debt first and getting rid of accumulated high interest makes sense. You save that extra interest that you would otherwise pay towards your loan.

    It is important to pay off the high-interest debt first!

    The reason for the increased interest in unsecured debt is simple. Unsecured debt does not require collateral that can be sold to repay part of the loan when the borrower defaults on the repayments. Thus it poses more risk of non-repayment to creditors.

    By comparison, secured debt uses your home or vehicle as collateral; it is safer for the bank or lender; therefore, secured loans often come with lower interest rates than unsecured debt.

    There is another huge benefit to paying off high-interest unsecured debt first, aside from saving on added interest. As you pay off these debts, you eliminate them one by one and focus only on paying off low-interest debts, e.g. your home loan and car finance.

    This is known as the snowball or avalanche method, where you focus on paying off several smaller debts by interest rate. Your credit utilisation ratio becomes much lower, too, which is good news for your credit score.

    Specifically, your credit utilization ratio calculates how much you still owe to creditors (on a credit card, for example) compared to your total credit limit (on the same credit card). The lower this percentage, the better.

    By paying off debts, you owe less to banks and lending institutions, and your ratio improves. Generally, creditors view 25-30% as a good credit utilisation ratio.

    The goal of paying unsecured debt first is to work faster towards paying off debt until you are left only with secured debt in your budget. At this point, it is easier to put a plan into action to become debt-free one day.

    This is the best way to pay off unsecured debt (credit card, personal loans)

    Despite your best efforts to reduce unsecured debt, you may struggle to manage multiple credit lines, high interest, increased outstanding balances on credit cards, and a dangerously high credit utilisation rate.

    Irregular and missed payments are also familiar with mounting unsecured debt. For creditors, this is a sign that you are heading into major financial trouble and you need help.

    Debt counsellors can take an objective look at high-interest unsecured debt to reduce the number of monthly instalments and devise an affordable repayment plan, thus minimising the risk of non-payment to financial institutions.

    Bundling all your unsecured debt together in one monthly instalment and renegotiating interest rates simplifies debt management to the point where you can confidently resume payment and eliminate bad high-interest debt once and for all.

    Our professional DC Debt Clear debt counsellor can help you stay on track with your debt repayments through a quick and affordable debt counselling assessment and if needed by introducing you to the debt review process, our debt counsellor is registered with the National Credi Regulator (NCR), get in touch with us by visiting www.dcdebtclear.co.za.

  • How “Junk Status ” Downgrade Will Impact Consumers

    How “Junk Status ” Downgrade Will Impact Consumers

    The S&P downgrade of SA’s foreign currency debt to junk status has been all over the news of late and a talking point for many South Africans. It’s media hype my die down eventually but its actual effects will have a longer stay. It will undoubtedly the economy on a large scale and affect consumers, businesses and government expenditure.

    The extent of junk status on South African

    According to Jacobus Eksteen, the senior data analyst at credit bureau Compuscan.

    “Companies, especially parastatals, will be seen as having higher implied risk. Therefore, it will be more difficult to issue debt in the sense that there will be less demand and the demand will be at higher interest rates.”

    “Institutions buying the debt will also know that they will have to take on more risk, which makes the higher interest rates less attractive.”

    He said it is ultimately a negative sum game for South Africa, as “someone” loses.

    “Companies will most likely need to pay more to service debt, thus reducing their profit and potentially increasing pressure on consumers by offering lower value for money to try to compensate,” said Eksteen.

    “Further, economic growth stems from consumers’ ability to spend and with this being impacted the economy will also be negatively affected, resulting in fewer jobs and less disposable income amongst consumers.”

    As for the banking industry, in his view banks are likely to struggle more to get funding and their cost of capital will increase. This is especially true for banks that obtain a large part of their funding from foreign sources.

    “They will also very likely try to shift the pressure to their retail and commercial clients. On the plus side, SA’s banks are well capitalised and relatively stable,” said Eksteen

    What does junk status mean for consumers?

    A weaker rand means petrol prices are likely to rise. If petrol prices go up‚ food prices will follow. The raw ingredient of petrol is oil‚ which is bought in dollars‚ so when the rand weakens‚ oil prices rise and so does the petrol price. The knock-on effect of a weaker rand is higher transport costs. Higher transport costs affect the price of everything moved by trucks – from food to imported goods and anything you buy at a shop. This will definitely affect many consumers spending habits and to stretch monthly budgets even further.

    What does junk status mean for debt?

    When giving their reasons for downgrading the SA government’s foreign debt‚ Standard & Poor’s predicted that interest rates would rise‚ regardless of their downgrade decision. Ongoing tensions and the potential for further event risk could weigh on investor confidence and exchange rates‚ and potentially drive increases in real interest rates. If interest rates go up‚ as S&P expects‚ the cost of borrowing goes up.

    This increases your credit card repayments and the amount you need to pay the bank every month for your short-term loan or car and home loan. The real effect of the downgrading will be of the up-and-coming middle class who are teetering on the brink of making the middle class. Suddenly their debt becomes more expensive and they can’t afford it and their home is foreclosed‚ or they have their cars taken away by the bank [due to missing repayments].”

    Analysts also expect inflation to rise as a result of S&P’s decision and the Reserve Bank often hikes interest rates in response to higher inflation.

    What does it mean for taxes?

    Food‚ petrol‚ and the cost of your loan won’t be the only things going up. Taxes could also rise. The government borrows almost monthly to pay its bills as it spends more than it earns. Many institutions such as banks are not allowed to invest in junk status debt. This means the government will need to borrow from people who are willing to invest in higher risk debt and this is more expensive. Which will intern affect the budgets for state-owned parastatals as well as the quality and roll out of government service delivery.

    Junk status pressure

    As you can see junk status will affect almost every part of the South African economy and the cost of living will continue to rise rapidly. If you’re feeling overwhelmed by your current financial situation which will only be further compounded by junk status, feel free to contact us. To Speak to one our consultants about debt review contact us here.

  • How to be Financially responsible

    How to be Financially responsible

    The cost of living is extremely high,  and there are many South Africans who simply don’t have the extra money to put into a savings account right now. We therefore need to seriously look at saving money by cutting costs and changing our lifestyle.

    Prioritise your wants and needs

    We need to be honest about what we want and what we need. Daily necessities, getting rid of our debt  – as well as school fees, school uniforms and stationery should be top of mind as we head into January.

    Differentiate from your wants and your needs- be honest with yourself

    There is no shame in not being able to afford something. Stop all and any unnecessary spending. Some people get into the mindset of “things are bad, I’ll feel better if I spoil myself and my kids”.

    This isn’t a good train of thought. Splurges on things that bring us momentary pleasure right now, can have disastrous consequences, as interest rates and prices are still set to rise.

    Set aside the time to collect and store all of your Financial contracts and paper work

    • Though it’s not something we easily acknowledge, the holidays are the perfect time to go through the paperwork and make a note of who you owe what to.
    • Have a look at what your interest rates for every debt is. If you can afford to, then pay back the most expensive ones (the ones with the higher interest rates) first.
    • Examine your contracts for credit and life insurance.
    • Check out how long you still have to be paying on all your accounts.
    • It is vitally important that you have a complete overview of what your finances look like, right now, so that you can get a plan in place for the new year.

    Obtain a credit Report

    Every South African consumer is entitled to one free credit report from every credit bureau, once a year. Go online, and make the effort to get yours.

    Create a monthly budget

    Drawing up a budget may seem boring, but it is a valuable tool in helping you manage your finances.

    • Don’t keep your budget in your head. It doesn’t work.
    • Rather write it down on paper, do it on your PC or use one of the many free budgeting apps available.
    • Sometimes you need your financial situation to stare you in the face, so that you can see exactly how much you are spending and possibly cut down if needed.

    Scale down your life

    • Cancel subscriptions to apps you don’t need.
    • Cancel duplicate insurances, especially those offered as a side product.
    • Check out the terms and conditions and cancellation clauses and penalties applicable.
    • Get comparative quotes on medical aids, insurance, etc
    • A roof over your head is a necessity. Paying rent in an area you can’t afford isn’t. Considering relocating to a cheaper location.
    • You need transport to get around, but you don’t need a big fuel-guzzling car, especially with the rising costs of fuel.

    Save money day to day

    • Switch off your geyser during the day. If you save R10 a day on electricity this way – that’s R300 a month that can go towards something else
    • Check how many times you are getting take-aways. Make food that feeds more people – and where leftovers can be frozen.
    • Check for specials on cellphone data and airtime deals.
    • Do your homework and find cheaper food prices. By keeping track of “specials” on various grocery stores, you can save quite a bit of money on your weekly or monthly grocery purchases.
    • We need to stop living beyond our means. If that means acknowledging to ourselves (and others) that we can no longer afford what we previously could – then so be it.

    There is no shame in acknowledging that things are tough right now. Once you identify what your financial problem areas are, then you can concentrate on finding solutions to them.

  • Debt Review Companies

    Debt Review Companies

    This post was last updated on 25 March 2022

    In this day and age it is difficult to find a reliable debt counselling company, many companies sell mediation (Which is not Debt Review and has no legal protection). We here have put together a list of debt review companies that can assist you nation wide and remember to ask to speak to the debt counsellor directly.

    Top 12 Debt Counselling companies

    • DC Debt Clear (Pty) Ltd – email address: info@dcdebtclear.co.za
      DC Debt Clear (Pty) Ltd was established by our director Cameron Nel some of his qualifications are as follows: an admitted attorney of the High Court (western Cape division), graduated from the university of the Witwatersrand and holder of a four year LLB degree.  With more than five years of specialised practice in debt reviews as an admitted attorney, it became clear to him that more needed to be done for consumers in the industry. Therefore it is the goal of the company to revolutionize the debt counselling industry. The company holds itself to the same ethical standards as the legal fraternity and will always put your interests first.  

    • Credit Matters (Pty) Ltd – email address: admin@creditmatters.co.za
      Credit Matters is one of the largest, national debt counselling businesses in South Africa. We started operating in July 2007 after the National Credit Act came into existence. Amongst other things, provision is made in the Act for the registration of debt counsellors and for debt restructuring for over-indebted consumers.

    DebtBusters is part of Intelligent Debt Management (IDM Group), founded in April 2004. The IDM Group has established itself as South Africa’s leading and largest debt management company. IDM offers solutions to South African consumers who are financially stressed and struggling with debt. These consumers often feel trapped in their situations, hopeless about their futures, and with nowhere to go. We believe they deserve a second chance: to see life after a debt, and build a financially-healthier future for themselves and their families.

    DebtSafe is proud to have become one of the biggest Debt Review companies in South Africa. For over a decade we have helped fix the debt of more than 30 000 over-indebted South Africans.

    Pioneer Debt Solutions is a company that falls under The Pioneer Group, which was first established back in 2011. We offer expert debt counselling services, and it has always been our objective to assist people who have found themselves in an overwhelming debt-related situation. To date we have helped over 50,000 South Africans through our professional debt counselling services. We are registered with the National Credit Regulator (NCR); and over the past 5 years, we have been placed in the Top 5 Debt Review companies in the National Debt Review Company category.

    At NDA we understand that, when it comes to putting the wellbeing of your finances into someone else’s hands, you need to know as much as possible about them so you can be absolutely certain that they are trustworthy, responsible and have your best interests at heart.

    Onedebt prides itself on the fact that it lives its vision, which is to create real value to over-indebted consumers, by delivering a crucial financial service, whilst creating job opportunity to more than 70 full time. employees. The management team of Onedebt has more than 20 years’ experience in the financial services sector, and has sincere empathy with over indebted consumers, who struggle on a daily basis because of out of control debt.

    Zero Debt is a professional debt relief company with an impeccable track record. We aim to help you on your way to a debt free life. We believe in providing our clients with the personal attention that they deserve. Join us today and we will assign an experienced debt consultant to your case who will accompany you through your entire journey to debt freedom. Our entire team will be at your disposal and will go the extra mile to look after your interests. Whether it is protecting your assets, answering your questions or dealing with your credit providers, we’re ready to fight for you! And believe us, we’re really good at it! All our debt consultants are experienced in negotiating the best deal for you. We frequently deal with all the major credit providers and have had great success in reducing our clients’ monthly debt repayment amounts.

    At Sandton Debt Counselling our debt experts will take over your financial stress while you take care of what is really important.

    Consumer Wise makes use of top-quality personnel from across the cultural and language divide, ensuring that clients will benefit from specialized service in their Home Language. We are in the privileged position to have 4 registered Debt Counsellors permanently in the service of Consumerwise. All our Fees are regulated by the National Credit Regulator as is prescribed by the National Credit Act 34 of 2005 and is included in your personal repayment plan. Consumer Wise has an excellent relationship with Credit Providers, making use of the “fair share” principle. We have branches in most of the major Cities in South Africa, ensuring that our services are available country-wide. All Consumer Wise personnel are bound by our strict and unique personnel guidelines, ensuring that your application and information will be dealt with with the utmost professionalism and confidentiality

    The DebtCare team consists of qualified debt counsellors with combined experience of more than 50 years in debt rehabilitation. To date, more than 15 000 over-indebted South Africans have chosen DebtCare to help them get out of debt. Our success lies in our tightknit team of debt experts who offer debt relief through personal attention. Every case of debt counselling is different, comes with a unique set of sensitivities and requires a fresh approach.

    Debt Rescue is operated by debt counsellors, attorneys, accountants and ex-senior bankers. Because Debt Counselling is a serious legal process, not all registered Debt Counsellors are necessarily capable to deal with the challenges associated with the process. Dealing with a competent Debt Counsellor can lead to a life-changing success but, in the hands of an incompetent Debt Counsellor, the process can be disastrous.

  • How to improve your credit score in 6 steps

    How to improve your credit score in 6 steps

    WHAT IS A CREDIT SCORE

    In South Africa a credit score is a three digit number that allows various credit providers (companies that offer your credit) to assess your credit worthiness and ability to to pay back your loan. The shortest answer would be simply its a risk factor indicator. If your score is low you will most likely pay more interest and get less credit. If your credit score is high you will most likely get more credit at a reduced interest rate.

    WHERE CAN I GET MY CREDIT SCORE

    The easiest way to get a hold of your credit score is to apply online. Remember a credit score is different to a credit report. A persons credit report is a breakdown of a persons entire credit history and is quite detailed, the credit will also show a persons current credit score. We recommend you google the following credit agencies – XDS(https://www.xds.co.za/), Compuscan (https://www.mycreditcheck.co.za/), Transunion (https://www.transunion.co.za/) or contact your bank or request same on your banking app.

    Look at your monthly budget

    TRICKS TO INCREASE YOUR CREDIT SCORE FAST

    1. Use your credit card like a debt card– use it through the month then pay it back all before the 25th of each month.
    2. Never default on your debt– all credit is linked to your credit report, if you skip one credit provider it will have an overall impact on your credit score.
    3. Lower your credit utilization rate– if you cannot use R20 000.00 credit per month then lower this amount to R10 000.00 this shows you are active on your credit profile and have the funds to afford the R10 000.00 credit each month.
    4. Request a copy of your credit report– request an annual credit report, you get a free credit report a year, use it.
    5. Do not apply for to much credit– if you apply for to much credit to quickly it will reduce your credit score, do not open up 4-8 clothing accounts rather open one credit card up and use the one card to shop at various stores.
    6. Pay off some of your smaller debts– if you have small debts of between R1000.00 and R3000.00 pay these off as fast as possible. It shows you are financially savvy and can settle your accounts.
    Warning and dangers of debt

    DANGERS TO AVOID

    1. Default judgements – This means you failed to pay your credit and debt collectors have obtained a court order. This negatively affects your credit score and potentially stops you from getting credit.
    2. Sequestration– This means you cannot afford to pay back any of your credit and thus all your assets are being taken from you to pay off all your debts. You will no longer be able to access credit and this can be for a period of 15 years and have future life long implications.
    3. Administration– This is similar to sequestration and default judgements to a degree, you will have an appointed administrator that will administer your estate, you will be under administration until you can prove you are able to settle the debt or have done so, you will need to apply to court to have this order taken away.

    WHAT TO DO IF YOU ARE TO FAR GONE?

    If you ever find yourself in a situation where you have jumped from credit provider to credit provider just to be told no one will give you a loan no matter how hard you try. Then there is still hope. In these circumstance what most likely happens is a person has created a bad reputation with all credit providers but avoiding debt collectors and not defaulting completely from their credit obligations but paying in a piecemeal fashion. This causes such damage to a persons reputation and credit score that it could take a life time to recover. It is not as extreme as the above dangers but it is almost worse as you find yourself falling into a deep dark debt pit. The best option on the market at this point in time is Debt Review – we recommend you send them an email at info@dcdebtclear.co.za- this is because it is a highly regulated industry which is governed by the National Credit Regulator in terms of the National Credit Act 34 of 2005. It will help you as you will be issued a clearance certificate at the end of the programme that essentially creates a clean slate for you. Your credit record is expunged and it is as if you were starting a new credit life without the preexisting baggage from your past.

    DC Debt Clear logo
    www.dcdebtclear.co.za
  • Breaking The Cycle Of Perpetual Debt

    Breaking The Cycle Of Perpetual Debt

    In terms of the National Credit Act, 34 of 2005 (s131) when a consumer surrenders the goods, the credit provider must then follow the process set out in Section 127 (2) – (9) in order to realise the value of the goods. Once the goods have been sold, this amount is credited to the consumer’s outstanding account. If the amount is less than the settlement value, the credit provider may demand payment from the consumer of this outstanding balance. This is called a ‘shortfall amount’.


    If the consumer fails to pay this outstanding amount within 10 days after receiving the required notice, the credit provider may apply for judgment in terms of the Magistrate’s Court Act for the recovery of the remaining settlement value. If, however, the consumer pays the amount demanded after receiving the demand notice, judgment against him or her will be prevented.


    A different process is followed when a creditor seeks to enforce a judgment debt. In order to enforce a judgment debt, one may issue a writ or warrant of execution.
    In both of these scenarios the effect of the writ or warrant is to instruct the sheriff of the court to attach the property of the judgment debtor so that if the judgment remains unpaid after the attachment, the attached property can be sold at a Sheriff’s auction and the proceeds used to pay the money owed to the judgment creditor.
    A credit provider can also seize the assets of a consumer to settle other forms of debt as well. Once judgment has been granted and the judgment debt is not paid the credit provider is entitled to execute against the debtor’s property in satisfaction of the judgment.

    Execution is firstly made against movable property belonging to the judgment debtor. If, however, there is insufficient movable property to satisfy the judgment debt, then execution may be made against the immovable property of the judgment debtor. The immovable property must first be declared executable so that it can be attached. This application can only be done in the High Court.


    If the amount received from the sale isn’t enough to settle the total amount outstanding, the credit provider can then proceed with steps to recover the shortfall amount. The credit provider must, within 10 business days after the attachment, give the consumer written notice of the estimated value, and/or any other prescribed information.


    South Africa is one of the few countries where no conditions are placed on sales in execution of repossessed assets regarding the value that is generated. This has recently come under review.

    However, the NCR has stated that it is unfair that assets are sold well below their market value and have launched prosecutions against several credit providers, including banks, and are striving to ensure this protection for South African consumers. Consumers must realise that should they allow the process to get to this stage that they will end up owing more than they originally did, may incur excessive legal fees, may be forced to sequestrate, and may lose their assets. They should therefore act more proactively.


    The s.129 letter sent to them, notifying them of their default, provides them with an opportunity to seek assistance from a registered debt counsellor or other alternatives

    TO BREAK THE ABOVE CYCLE

    If we look at the diagrams above, we can see that possible solutions to breaking the debt cycle are as follows:
    • Increase income
    • Reduce expenses
    • Adjust debts
    • Practice smart spending
    • Start saving

    However, once an individual has fallen into the debt cycle and are in financial crisis perhaps due to changed personal circumstances, it is necessary for them to get outside assistance, and they have a number of solutions available to them. Let us examine the different debt relief mechanisms,
    namely administration, sequestration and debt counselling.

    Debt counselling is where a debt counsellor develops a repayment plan that is affordable to the consumer and acceptable to the credit providers. A debt counsellor does a budget to calculate how much an over-indebted consumer can afford to pay their credit providers and creates a payment plan for their credit providers in accordance with this. Debt payments are reduced by asking credit providers to extend payment terms and reduce interest rates. Unlike administration, the debt counselling process is set out in the NCA and regulated by the NCR and the NCT.