How Restructuring Debt save over-indebted consumers money.

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How Restructuring Debt save over-indebted consumers money.

In this week’s blog, we here at Consumer Debt Support (CDS), would like to share with our readers on the topic so often misunderstood. Debt restructuring can help consumers that are over-indebted. There is a silent cry for help of over 9 million consumers that desperately need assistance with their debt, an unavoidable pain of cutting into the household budget, preventing them to provide for their loved ones.

Our objective and main goal is to show and tell, of how we can help our consumers to save money every month, adding that to their cash flow for other family or house related expenses. We can make a difference and reduce the monthly payments to the creditors, which will bring much needed relief to the household budget.

We have compiled a general list of Household or family expenses of everyday needs and monthly obligations, for you to relate to your household budget.

  1. Rent or house premiums
  2. Groceries and accessories
  3. Milk and bread and meat
  4. Toiletries
  5. Electricity, rates and taxes
  6. Mobile phone(s) expenses (contract or pre-paid)
  7. Internet at home
  8. Medical aid
  9. Pharmaceutical medication for chronic or seasonal viral illnesses
  10. TV licence
  11. Transport
  12. Fuel cost using a car
  13. Maintenance and services and tyres on your vehicles
  14. Insurance and income protector
  15. Life cover
  16. School fees and after care (if applicable)
  17. Baby day care
  18. New school uniforms and student fees related to enrollments for the 2019 tertiary at colleges and universities
  19. Child support – court order for maintenance
  20. Spousal maintenance
  21. Vehicle renewal licence disk
  22. Property maintenance
  23. Domestic
  24. Gardener


The problem of RECKLESS LENDING in the credit market

There are various institutions and national retailers that will tempt or lead the consumers on, to apply for new loans in order to cover some of the existing debt. The panic sets in when the penny drops due to over-indebtedness when those applicants do not qualify for such loans. Some creditors are very aware of the laws with regards to Reckless Lending and they will informatively amend their deals to ensure that their clients qualify for their loans knowing that they cannot really afford to pay it back. Reckless lending is seen as a serious offence in the Magistrates Courts and with the National Credit Regulator (NCR).

Those creditors can determine the affordability of the client to that loan, with the information available to them on the credit bureaus reports. Their objective is to keep the consumer in more debt so that they can benefit from the prolonged repayments and interests.

It becomes a struggle to qualify for new debt or loans, and they are not aware of the easy and legal options available to help them.

Consumer Debt Support (CDS) can help and has the best repayment structured solutions available.

We help our clients negotiate a lower repayment plan which will suit their needs with regulated interest rates, to ensure that all the creditor co-operate and understand their situation. As a Registered Debt Counsellor, we are required to engage with our specialist attorneys, to enforce the new restructured plan, approved by a court of law, in order to help our clients to safe money and become debt free at the same time.

What can CDS do for consumers struggling financially?

We would like to share three examples of clients that applied for our help with their debt.  Where the outcome of over-indebtedness was assessed, and the good news for the client was that their debt repayments was restructured to one smaller and affordable payment plan. This calculation helped the individual to be more sustainable month to month and afford to pay their debt in a difficult economy.


 Client A: Classified as a Low-income Factory worker


Income:  Gross R5000.00                                             

Nett take home pay: R4890.00

Household expenditure needs: R4000.00

Debt exposure: R55000.00 outstanding capital debt.

Assessment outcome: Consumer is over-indebted, qualify for the program.

Creditors obligations: R4300.00 pm.

Restructuring outcome: R1500.00 pm.

Amount freed up for family commitments: R3390.00 pm



Client B: Classified as a Lower-Income earner as a Secretary


 Income:  Gross R15000.00

Nett take home pay: R11700.00

Household expenditure needs: R8800.00

Creditors obligations: R8400.00 pm.

Debt exposure: R105000.00 small unsecured debt, R120000.00 vehicle outstanding capital debt.

Assessment outcome: Consumer is over-indebted, qualify for the program.

Restructuring outcome: R2500.00, Vehicle R1900.00 – total: R4400.00

Amount freed up for family commitments: R7300.00


 Client C: Classified as a Middle-Income earner as a Teacher


Income:  Gross R39000.00                                           

Nett take home pay: R31000.00

Household expenditure needs: R18000.00

Creditors obligations: R22000.00 pm

Debt exposure: R148000.00 (R5400.00 pm) unsecured, home loan R960000.00 (R12000,00 pm), Vehicle finance R180000.00(R4600.00 pm), outstanding capital debt.

Assessment outcome: Consumer is over-indebted, qualify for the program.

Restructuring outcome: Bond: R7600.00 Vehicle Finance: R2800.00, Unsecured small debt and loans R3000.00 = R13400.00

Amount freed up for family commitments: R17 600.00


These clients were currently paying more than 70% of their income on debt. We strive to help the consumer to change the situation into a good positive outcome.


We have more than one option for our clients other than our Debt Review repayment plan and recommend it for those who want a shorter-term plan

Our Voluntary Debt Restructuring program

The program is not a long-term solution but a short term to help the consumer cover the gap while dealing with their financial challenges, exit the program at any time and continue with their payments.

This program is also used by unregistered companies to exploit uninformed consumers by offering these service plans as their better option. Consumer Debt Support (CDS) offers the VR program to clients as a registered debt counsellor to assist the consumer that wants to manage their monthly installments outside the official debt review program.

No payments are managed by CDS, the consumer pays an appointed and also registered legal Payment Distribution Agent (PDA), who ensures consumer’s money is paid as per the agreements set out in the application that suits the individual client financial ability.

Access to store cards and credit cards is not blocked and can be used freely as credit is available. The program only serves unsecured debts. What is great about this option at Consumer Debt Support (CDS) is that when the program is no longer serving the needs of the consumer, he can then switch to a debt review application.

For the reasons above the application must be referred to court. The registered debt counsellor will be restructuring the debt obligation of registered credit providers to a more affordable restructured payment plan. The debt counsellor informs all creditors of the new affordable payment plan and refer the matter to the Magistrates Court or the National Consumer Tribunal (NCT).


Why many consumers defaulting the restructuring program?

Consumers are opting for assistance with various other companies for help, then they receive SMS’s on their responds to the relevant advertising on Gum tree, Facebook, Linked-in or in media advertising in print. Many of these companies are not registered with the National Credit Regulator (NCR) and consumers are not aware what to ask or look out for.

Most importantly they are not assured that they deal with registered debt practitioners.

Consumers fail to ask questions like, who will pay their money to creditors and how do they know the debt will be paid every month.

Here are some questions that should be asked before consumers give their information to any person that want to assist them with their finances.

Who am I talking to?

What are your contact details?

What is the company name?

Where are the offices located?

Are they registered with the NCR (National Credit Regulator)?

What are the Debt Counsellors NCRDC number?

How does the program work?

How does the payments to creditors work?

How does the fee structure work?

When will the first debit order be running off my account?

Who stops the debt order by my creditors that is running of my bank account monthly?

Desperation deprives inspiration to success

Consumers are so desperate for help, they forget to inquire to the above questions and are not aware when they sign into these programs. Consumer Debt Support (CDS) can educate and assist throughout our blog’s, readers can share with friends and families and get the rightful information. Our main objective is to ensure consumers have success in debt review and voluntary debt restructuring programs with registered practitioners.

Debt Review is not a shame, it’s a way to freedom


How consumers can make contact with CDS and during Holiday standby for consumers that need help before January pay day.

Visit our website www.debtcentre.co.za for more information or WhatsApp me, Annienne Nel, direct on 0826412328 for a quick telephonic assessment.

Consumers can visit our offices in Parow, Bellville Cape Town by appointment, email correspondence or by video calling us on WhatsApp directly. Our consumer assessment consultant Morne, will be available on call during office hours on 021 930 5790 or on direct mobile 061 603 6037 for a quick telephonic assessment. We can help you immediately and all creditors can be notified within 24 hours after approved assessments. Our offices will be closed from the 22st December until the 26th December 2018, we will be available to help on the 27th and the 28th of December.


In Conclusion:

Struggling to pay creditors timelessly can be a very stressful. Consumer Debt Support (CDS), understands the difficult challenges consumers face when they can’t feed their families and cover their monthly debt obligations. Our examples shared is based on actual applications with real outcomes of ordinary people that struggle to pay debt obligations. By ignoring the problem when the debt escalates to the point of defaulting and negatively effecting credit reports and being blacklisted and a real threat of default judgments that can be enforced by creditors.


Message from the Author Annienne Nel.

Wishing you all happy holidays with God’s Blessings, and pray you travel safely where ever you may go. During this festive season one can find you end up in deeper financial trouble than before. You are not alone in the panic of how you will cope end of December and January 2019. Contact us for your peace of mind.



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