Debt Settlement Option

Sequestration vs. Debt Counseling

I believe that there is a place for Sequestration and Debt Review / Counseling in our economy.  The secret is to find the solution that is right for you.

Here is a financial comparison between the two processes:
This is a real client’s numbers.

Cost of Debt Review / Counseling

The total debt for the client is R364 522.17

Total repayment period – 60 months: 5 Years

Total Payment Period to Debt Counselor – 5 Years

Total amount paid to Debt counselor – R34 314.00

The Debt of R 364 522.00 will be repaid at approx R451 687.00 – if the creditors accept the reduced interest rates.  If the creditors do not accept the reduced interest rates then the debt will be repaid over a longer period.

You cannot access any debt for the time that you are under debt counseling.

Cost of Voluntary Sequestration

The total debt for the client is R364 522.17

Total period to rehabilitation – 4 years

Total payment period to Ursula Gouws Consulting – A small affordable Once off payment

Your contribution will be paid at approximately 25c to a rand; in this case – R92 000.00: We make it easily affordable.

You cannot access any debt for the time that you are under sequestration.

You will get finance for a car 6 months after your rehabilitation and 12 months for a bond.

(With a good credit record, of course)

Sequestration

Application is brought in the High Court of South Africa. The application can be enrolled within five weeks

Court rules entail that all creditors are included and that the court orders must be accepted by all creditors

No maximum debt for application to be lodged

The contribution is determined by the amount of debt you have. Currently this is calculated at 25cents to every rand owing – it does not accrue interest, and you get 18 months to pay

No further debt can be made

You pay the money direct to the curator/trustee.

Should you have an immovable asset (house) it will be sold by the curator/trustee to pay the creditors.

Debt Counseling
Application is made in the Magistrate Court but it can take up to a year before it is enrolled

Debt is excluded that has already been handed over to attorneys for legal action

No maximum debt to apply

You pay the entire amount plus interest and costs. This can take up to 30 years.

No further debt can be made

Monies are paid to a distributing agent and they pay the creditors.

Should you have an immovable asset (house) you may keep it if the bank has accepted a minimum payment and legal action has not yet been taken

Administration
Application is made in the Magistrate Court. Application is enrolled within two months

“Cash loans” agreements are excluded from an administration and you have to still pay the monies outstanding

The maximum debt for administration is R50,000.00

Should you owe, for example, R50, 000.00 it still accrues interest and costs. In other words, you will pay back approximately R132,000.00

No further debt can be made

Your employer must give permission that the repayment amount is deducted straight from your salary.

Should you have immovable assets; you must still pay the premiums and can keep the property

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