Debt Review vs Debt Administration
Debt Counselling & Debt Review
The Debt review procedure is incorporated by the National Credit Act Section 86 of Act 34 of 2005 which came in force on 1stof June 2007. An application is lodged in the Magistrates Court. Debt counselling is a type of mediator for over-indebted consumers. A consumer can seek the assistance of debt counselling, or the consumer might be referred by the court to a debt counsellor. Amount my exceed R 50 000.00.
The administration order procedure is incorporated by the Magistrates' Court Act Section 74 of Act 32 of 1944. An application is lodged in the Magistrates Court. This procedure was designed for individual's who could not be sequestrated. The total debt may not exceed R50 000-00. An administration order in magistrate court does not exclude a sequestration order in other words a person and can still be sequestrated. An administrator is appointed to manage the financial affairs of the debtor. This procedure is for individuals who are in a debt trap. The administrator is only entitled to claim 12.5% of money collected from the debtor as fees and pays pro rata dividends to the creditors every (3) three months, in relation to their claim amount.
Credit agreements cannot be included it`s in future debt