DC DEBT CLEAR (PTY) LTD

Category: Debt Review

  • How do I know when I am being crushed under the weight of my debt?

    How do I know when I am being crushed under the weight of my debt?

    f you’re struggling to repay debt, there may be more than the monthly instalments at fault. You could be paying too much debt interest. Reducing this debt interest is another way to make debt manageable.

    Debt Interest rates

    For any amount of money you borrow from the bank or credit institution, the total debt incurred comes with a specific interest rate attached to it. The calculated debt interest adds to the debt repayments throughout the loan duration, which means you will pay above and beyond the actual value of the purchased asset or initial loan.

    In effect, you will pay back more than you borrowed, and the difference is meant to quantify the risk the bank or lending institution is charging you for agreeing to the loan. How much more you pay in the end depends entirely on the accrued interest.

    Interest rates for debt are determined by the type of loan, secured versus unsecured debt, and the lending interest rate provided by banks or creditors, which is usually more favourable if the borrower demonstrates a good credit record and consistently positive debt repayment behaviour.

    Debt interest is significantly higher for unsecured loans that do not have any asset value to guarantee the loan. Credit cards, store cards, personal loans carry more risk for the lender and this is reflected in interest rates as high as 20% to 25%, which translates into considerable debt interest repayable on top of the regular monthly instalments.

    When applying for a loan, you have a better chance to receive a preferential interest rate and pay less on debt interest if:

    • You have a good credit score (above 600) or improve your credit score to minimise risk to the creditor
    • You have a healthy credit history and manageable levels of debt, paying off outstanding debt or paying instalments timely

    The principle debt versus debt interest explained:

    A high level of debt negatively affects your credit risk and credit score, but it also puts a premium on the total payable debt interest. As a result, the accumulated debt interest can reach dangerous levels close to the amount borrowed in the first place, the debt principal.

    According to the common law and the National Credit Act (NCA) of 2005, the borrower may not be charged more in interest than the original debt (maximum double the amount), although there are arguable instances and judgement debt cases where the borrower could be liable for further debt interest upon repeated debt defaulting (at the judgment debt interest rate). Read more about this here: https://www.news24.com/fin24/opinion/debt-can-you-be-charged-more-in-interest-than-your-original-loan-20190930

    Debt interest becomes unmanageable when you’re barely able to sustain the increasing debt interest accrued to the original loan:

    • If you can only afford the minimum on monthly debt repayments on credit cards, it could mean years before paying off the full debt, while still accruing interest over the initial principal. The solution is to reach an affordable repayment rate at a reduced interest to minimise the total debt interest.
    • If you’re unlikely to repay your monthly instalments and debt interest on the initial loan, the solution is to urgently review the loan and debt repayment plan to agree on a convenient instalment that you can repay at a lower interest rate. The priority is to resume the payments and cut interest to a minimum.

    Debt Review and Debt consolidation interest rates explained:

    The less debt you have, the easier is to manage the debt interest. Multiple similar debts at varying interest rates can be combined into one larger debt with only one monthly repayment and interest rate to service. The process, known as debt consolidation, simplifies debt management, giving you the opportunity to negotiate a more satisfactory interest rate overall. This is your chance to reduce the debt interest as much as possible.

    You can either take a new loan to consolidate existing debt (not recommended if you already have plenty of loans to sort out and a bad credit record) or undergo debt review, where you consolidate debts without taking a loan.

    Taking a debt consolidation loan make sense if you have a fairly good credit record, but has many risks. The new loan interest rate can be either lower or higher than the initial loan rates, depending on your creditworthiness and type of loan, secured or unsecured. A good debt consolidation interest rate should be always lower than the rate you were paying initially, but this is not always guaranteed. You may also lose your assets if you default on the secured debt consolidation loan.

    Debt consolidation under debt review makes sense when you have to consolidate bad debt through a manageable repayment plan without worrying about a larger loan (that you may not even qualify to take). Since credit scores are not required to be eligible for debt review, this is good news for those with poor credit score (under 500) and generally over-indebted borrowers with a debt-to-income ratio over and above 70%.

    Also, interest rates for debt consolidation are always reduced under the new repayment plan negotiated with creditors. Under debt review, debt consolidation interest rates can be reduced as low as zero, the monthly instalments are dramatically decreased, and assets are legally protected by court order.

    The debt counsellor assesses your debt repayment plan and talks to creditors to reduce the amount of debt principal and interest via the new consolidated debt scheme. You will not be able to borrow money again while under debt review, meaning you can focus exclusively on eliminating debt and changing your money habits for the best.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • Explained: Debt consolidation and interest rates

    Explained: Debt consolidation and interest rates

    Debt consolidation unifies multiple debt, typically high-interest unsecured debt such as credit cards, into a single manageable debt payment. You can use the process to re-organize debt, reduce monthly repayments, pay back a lesser amount, and get a better interest rate on your loan. Below we look at debt consolidation and interest rates options.

    Debt Review or a Debt Consolidation Loan?

    There are two ways to approach debt consolidation: either on your own by taking another loan to replace your existing debts, or having a debt counsellor renegotiate a consolidated debt loan on your behalf.

    Take a debt consolidation loan. Use the money from this new loan to pay off the existing debts in full, then pay back the remaining amount to the loan provider in monthly instalments. You have to negotiate the new loan terms and discuss a lower interest rate with the debt consolidation provider.

    The better your credit score and standing, the lower an interest rate you can expect. Hence, it may not be the ideal choice if your credit score is too low or you are over your head in debt.

    Choose debt review consolidation. Use this legal process to secure a reduction in interest rates or a loan extension, especially with high indebtedness levels.

    Your debt counsellor handles the debt consolidation process on your behalf and manages the repayments directly to all creditors. At the same time, you only need to pay back the debt counselling provider one affordable monthly instalment until the debt is paid off.

    When should you use debt consolidation?

    Debt consolidation can be an excellent option when you have difficulty in managing or paying off multiple debts every month:

    • You have multiple debts to pay every month and need to simplify your finances into a single manageable loan
    • You struggle to repay all your monthly loans or credit accounts on time, and you benefit from having only a single debt payment to worry about
    • You have little to no disposable income left after paying each debt on time, so you need to reduce the loan repayments to free up cash
    • You are defaulting on payments because your monthly instalments are too high, and you need to lower them asap by renegotiating a lower interest rate or extended loan terms

    As helpful as it sounds, debt consolidation is certainly not the cure for all your debt problems or uncontrollable spending habits. Depending on your financial circumstances, it may bring only negligible savings or relief to a deeper debt issue.

    If your debt is out-of-control, speak to a debt counsellor to assess the overall situation before jumping onto debt consolidation loans.

    Suppose you are severely over-indebted and your debt repayments exceed more than half of your income, or you are missing out on regular repayments. In that case, even a single debt consolidation loan may prove difficult to negotiate or manage on your own.

    Choose instead professional debt counselling help and debt review consolidation to get the maximum out of the renegotiated repayments and interest rates.

    How does it help to have one interest rate on your consolidation loan?

    With multiple credit lines, interest rates may vary considerably depending on credit type, risk profile and credit score. Debt consolidation removes the multiple interest problem through one fixed interest loan. You are charged a single interest rate on your debt consolidation loan, often a reduced rate compared to the original loan terms

    The interest rate for the debt consolidation will depend on the total loan amount, the monthly instalment that suits your budget, and the lowest interest rate you can qualify for, according to your credit record.

    What is considered a good debt consolidation loan interest rate?

    For example, you can have three credit cards with interest rates ranging from 20% to 24%. You could replace the three credit card debts with a debt consolidation loan at an 18% to 20% interest rate, pay off the initial credit and continue with the loan repayment at the new much lower rate. Debt interest consolidation loan rates can be as low as 15%.

    Generally, interest rates for debt consolidation loans tend to be higher, as with any high-risk loan, particularly if you have a history of defaulting and over-indebtedness. This means more accrued interest and an increase in the total payable debt amount.

    You may, however, negotiate a lower monthly payment and an extended loan term to replace multiple debts, which counts towards your ability to pay off the one debt without fault every month.

    In the case of debt review consolidation supervised by a debt counsellor, debt consolidation interest rates are reduced as renegotiated with credit providers to give the borrower the chance to pay off the debt.

    As a result, you decrease instalments and pay back less debt than the initial agreement via one lower monthly repayment. However, prepare to have your debt review on your credit record, which may be a small temporary price to pay for getting rid of your out-of-control debt.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • What types of debt can be consolidated?

    What types of debt can be consolidated?

    Taking control over your debt gets easier once you understand the different types of debt and learn to prioritise paying them off. This blog explains various types of debt, the worst types of debt, and which debts can be consolidated when undergoing debt counselling.

    Different Types of Debt

    Debt can be categorised in several ways: based on loan duration (short-term vs long-term), interest rate (high-interest rate vs low-interest rate), loan purpose (consumer debt vs business debt) or the existence of collateral (secured debt vs unsecured debt).

    To make it simple, most debt people incur during their lives can be divided into these main categories:

    • Secured debt is any debt that requires assets as collateral. Creditors approve the loans backed by the purchased assets – vehicle or property – as collateral. The creditor can seize the assets if the borrower does not repay the loan. Examples of secured debt include mortgage, home loans, vehicle finance, and a secured credit line.
    • A mortgage or home loan is a common type of secured loan between lenders and borrowers, backed by real estate, land or personal property as collateral. It represents a large debt typically issued long-term (up to thirty years) at the lowest interest rate to make monthly repayments more affordable for the borrower. The real estate or land is serving as collateral in case of non-payment.
    • A vehicle finance or car loan is another type of secured debt. The vehicle is the asset that serves as collateral for the loan and can be seized and sold off if the loan is not repaid. Typically, vehicles are financed up to five years at a lower interest rate than other consumer debts, making repayments more manageable.
    • Unsecured debt does not require collateral and is granted solely based on the borrower’s creditworthiness and promise to repay the loan. Most consumer or retail debt, credit card debt and personal loans fit into this category. This types of unsecured debt represent a greater risk and cost to the lender. Therefore, it generally comes with a higher interest rate than secured debt, and it is considered one of the worst types of debt to incur.
    • Revolving debt is a type of credit where the consumer repeatedly borrows money to a maximum limit. The debtor can spend any amount until the credit limit is reached, which means debt repayments can vary according to the currently owed funds. The best example of revolving debt is a credit card or a credit line with a specific credit limit. This type of revolving debt is unsecured. Revolving debt can also be secured, for example, a secured line of credit with funds backed by collateral.

    The Worst debts to have are the following:

    Using the above classification, the worst types of debt are unsecured debt and revolving debt with no collateral to protect creditors, hence a higher interest rate for the borrower. Generally, consumer debt such as credit cards, retail stores and clothing accounts, and personal loans that finance such consumables are viewed as bad debt.

    What types of debt can be consolidated by a loan?

    Debt consolidation is the act of taking out a single loan to pay off multiple debts. The borrower can apply for either a secured or unsecured debt consolidation loan (with or without collateral).

    Debt counsellors recommend consolidating the worst types of debt such as multiple unsecured debts, e.g. credit cards, retail accounts or personal loans, into a single loan.

    Such debt consolidation loans generally have a longer loan duration than the initial credit agreements to make monthly instalments more affordable at a lower interest rate. It can reduce monthly repayments considerably.

    Debt consolidation is, therefore, a viable option when consumers cannot repay piling debts due to income loss, salary cuts, or they need to lower their monthly debt instalments to make it through the end of the month.

    However, debt consolidation is not without risk, including possible damage to the credit score and the improbability of securing a low-interest rate or collateral loss in taking a secured consolidation loan.

    It is best to rely on specialised help when applying for debt consolidation. Debt Counsellors can devise a new debt repayment plan and renegotiate original loan terms with creditors, banks and financial institutions to ensure it benefits the borrower after the initial debt assessment.

    Our professional DC Debt Clear Debt Counsellor will help you stay on track with your debt repayments through a quick and affordable debt assessment process, if you are in need of greater help he will introduce you to the Debt Review Process. All of our debt counsellors are registered with the National Credit Regulator (NCR). Visit our page at www.dcdebtclear.co.za for more assistance.

  • 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.

  • 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.

  • What is Debt Counselling?

    What is Debt Counselling?

    Debt counselling is a debt relief mechanism for over-indebted consumers. A consumer can seek the assistance of debt counselling on his or her own, or he or she might be referred to a debt counsellor by a credit provider, the court or the NCR.


    The main purpose of debt counselling is to:
    • Assess a consumer’s state of indebtedness;
    • Facilitate debt re-arrangement with credit providers; and
    • Make recommendations to credit providers and/or magistrates courts on behalf of overindebted consumers.

    The NCA created a new profession: debt counsellors and provided an intervention for overindebted consumers. The function, role will be discussed below.
    The debt review process should take 60 business days. The debt review
    process of 60 days can be divided into three (3) stages:

    1. Review the consumer’s information provided by the consumer himself, credit providers, and credit bureaus, and make a determination of over-indebtedness or reckless credit; then
    2. Rearrange the consumer’s financial obligations based on what they can afford to pay, but that will still pay creditors in a timely fashion, and make an offer to creditors; and
    3. Restructure the consumer’s accounts accordingly, based on what was accepted by creditors, or their counterproposals, and submit this to the court for a final decision. Once the court has agreed, this restructured plan is sent to the PDA (Payment Distribution Agent/s) for payment purposes. These cascading payments are then reviewed regularly by the debt counsellor, and if necessary rearranged and
      restructured again if needed.
      This is then followed by after care and monitoring the consumer’s progress towards rehabilitation.

    Consumers should always be made aware of the negative consequences associated with the inability to repay credit. They need to be made aware that they must have enough money available to repay obligations under debt agreements. The effect on the consumer’s credit record and other affairs should be explained.
    When the debt counsellor and consumer first meet there is an informal discussion of the circumstances that has brought the consumer to this point. These reasons are important as they need to be supplied to a magistrate when the matter is brought before the court. The purpose of this consultation is to get more information or clarification about the application of the consumer and to determine if debt restructuring is an option. There will also be a high-level calculation of
    over-indebtedness done.

    Debt Counselling is a skill it will have an impact on your life, you should always ask to speak to the debt counsellor who is managing your affairs or potentially managing your affairs and ask them questions.