The cost of a rejected
debt counseling application is R300, which to someone who feels over-indebted, is a lot of money. It helps to know before hand whether or not you qualify for
debt counseling. Any person who could be declared over-indebted qualifies for the process.
To determine whether or not you’re over-indebted, subtract your monthly expenses (excluding debt repayments) from your monthly net salary (after tax). Add the total amount you owe in debt each month. If the amount of debt you owe exceeds or is greater than the amount of income you have left after paying off all your monthly expenses, you are most likely over-indebted. This is not a certainty as debt review will look at ways for you to reduce your monthly expenses in order for you to pay off your creditors. If you can work out a way to reduce your expenses in order to pay your creditors, then you can avoid paying the rejection fee as well as having your name blacklisted during the debt review process.
If you apply for debt review and it is accepted, all your accounts will be frozen. This means that you will no longer be able to use the accounts. You will however still be expected to make payments on the accounts. The only accounts excluded from the debt review process are those accounts that have already earned you a judgement against your name.
During the debt counseling process, you will be prevented from taking out any more credit and you will be blacklisted. Given that you cannot exit the debt counseling process once accepted, it is important for you to consider if you really need debt counseling.