How to Recover From Compulsive Spending and bad Debts

How to handle debts and Compulsive Spending with debt counsellingHow to Recover from Compulsive Spending and bad Debts

Over the years we have come across hundreds if not thousands of clients who get bewildered by their financial obligations. One thing is clear that debt sneaks up on you until the monthly amounts owed to credit providers reach unmanageable proportions.

Too often do we see that even small issues such as a once-off motor vehicle repair can tip the balance for the borderline over-indebted consumer to being over-indebted. This is because they have no savings on which to fall back on. If you are in debt the worst thing to do is hiding. The best thing to do is tackle the situation head-on and with a little bit of help and articles like these will you find that you can handle your debts. We have compiled a list of suggestions to handle spending and debt.

Another problem is the issue of compulsive spending.

Shopaholics have made their track records from their unmanageable spending routines. In these circumstances, the unhealthy habits can turn into a full-time issue of compulsive spending.

  • Compulsive spenders will buy items that they do not need. Their clothes and shoe cupboards each month get filled with shoes and clothing which they will hardly use and don’t even think of using in the future.
  • Compulsive spenders are spending more than what they earn each month and turn to credit cards and loans to maintain their unhealthy spending nature.
  • Compulsive spenders will never admit that they have a problem.
  • Compulsive spenders will conceal their problem from close friends and family.

Create a Budget - Keeping an eye on your finances using a budget

Most consumers don't realize that they are soon heading to becoming over-indebted. The reality, unfortunately, is that most of these consumers will only recognize that they are in trouble the month they are unable to pay all their credit obligations. When you're faced with what it is a huge mountain of debt, it may seem extremely hard to visualise overcoming it. Nonetheless, with some attentive budgeting, you can settle your debt without changing the quality of your life. Regardless of how big your debt is, you can create a plan to start working on repaying your debts

To prevent ever getting into debt it is vital to set up a realistic budget with exact net income and expenses. The hard part is to stick to the budget and over a couple of months of budget spending, you will find it will get easier to live on a set budget. To live within your means, it is vital to create a budget to understand how much money is available to spend and how much money is available for savings.

Step - Setup a budget that is practical and realistic. Follow your spending plan.

Credit Cards versus Debit cards

If you know that you are always tempted to overspend on credit cards, leave them in your car when you go out shopping. Using your debit card for purchases as opposed to a credit card will help with over-spending.

Step- leave your credit cards at home and only use in emergencies

Establish a Spending plan

To take control of the financial circumstance you need to use your money in a sensible way and by sticking to a budget. In this budget, it is vital to show how much money you have each month after taxes and medical aid deductions. Next step is to record all your living expenses and creditor expenditures.  Document all the spending during the month to track spending patterns.  The goal of your budget and spending plan is to make sure that your living costs get catered for before any kind of discretionary spending.

Step- Establish a spending plan and cut unnecessary spending

Get in touch with your credit providers when faced with problems

If you're having trouble paying your debt, contact your credit providers as soon as possible. Tell them why you have fallen behind, and attempt to repay the arrears before the account gets handed over to collections firms.

Avoid pricy holiday getaways

You have set up your realistic budget and you are sticking to it and in the process, you are repaying your debt. Repaying debt without the help from a debt counsellor you might be stressing trying to stabilize job and family life. To ensure your career and family life does not get affected by the debt-related stress you will desire a holiday trip. Now is the time to stay levelheaded and this is the time you will need to be creative to take a break.

When you are drowning in debt, it is advisable to avoid those expensive getaways. If you don't take a break and you are under stress and anxiety because of debts, you might experience burnout. To stabilize your stress, anxiety, and your demand for relaxation, we would suggest a cost-effective local getaway.

A cost effecting weekend away camping is a smart way to leave your headspace without having to spend on an expensive holiday.

Consequences of overspending

  • Wild spending without having a budget and overspending will Lead to serious Consequences
  • Overspending can ruin your marriage
  • Overspending can Damage Your Career
  • You will become a deceptive person trying to hide your overspending habits. This deception might hurt family, friends and relationships.
  • It Compromises Your Health
  • It will hurt your credit score with all the credit bureaus in South Africa

4 Main reasons debt is bad for you

  • Without realising it you will be spending more money on an item if you used credit to buy the item due to high-interest rates
  • If you are not the owner of your home debt can keep or delay you from buying your own home
  • Debt can destroy marriages Marriage and debt  
  • Debt will hurt your credit score

Debt Counselling Solutions

We are proud that our debt counselling company will assist you to get out of debt by reducing your monthly instalment due to creditors. The debt counselling process with reduced interest rates as well as charges will include all your eligible accounts. You will have a single reduced monthly instalment to pay. This instalment gets paid over to a payment distribution agent. Our PDA will pay all your financial institutions according to our repayment proposal.

Start working on paying off your debt today to get your finances on track. The good news is as soon as your debt gets settled you will then be able to save for your retirement. Get in touch with us today to let us assist you to be debt-free. Contact us and we will advise in detail the benefits of debt counselling or simply visit our debt counselling page for more information. 

Alternatively, you may visit the National Credit Regulator website for valuable information on debt counselling.

Navigate to:

Debt Counselling Fees - 2019

Debt Counselling Fees 2019 Credit Salvage

Debt Counselling Fees - Debt counselling regulations 2019


One of the most frequently asked questions we get daily is what are the Debt Counselling Fees? South Africa dodged a recession in the second quarter with 3.1% growth. While we dodged a recession South Africans are adjusting to living in a country where unemployment and the cost of living are high. Research conducted by external companies shows that a large number of South Africans are under pressure due to elevated debt rates. These consumers find themselves in this unfortunate situation and survive from payday to payday. According to another research found that financial stress causes mental and other health-related problems, therefore, consumers are turning to debt counselling to relieve the negative effects of being over-indebted leading to the most frequently asked question – what debt counselling fees are or what is the debt counselling regulations regarding fees.

Debt counselling in South Africa is regulated by the National Credit Regulator and the National Credit Act. Debt Counselling is executed and performed by a debt counsellor who will negotiate with creditors on a consumer’s behalf. Debt Review aims to extend the duration of each credit agreement by reducing instalments and interest rates to assist debt-ridden consumers to pay off debt. Below are the standardised fees.

Step 1 - Debt counselling regulations - Application Fee

This is a flat fee to cover the costs of the debt counsellor to process the completed debt Review application.

Regulated Cost - R50

Payment Due Upfront and in full

Step 2 - Debt counselling fees - Administration

The second step in the debt review fee setup is the Administration Fee. The debt Review administration fee is a regulated once-off flat fee which gets charged by the debt counsellor. This fee is for administering the following processes:

  • Consultation with the consumer. The consultation is the explanation of the Debt Review process and an explanation of the regulated fees.
  • Notifications to credit providers advising them that the consumer has applied for debt review. Also, known as the Form 17.1 Process
  • Capturing the consumers' details on the NCR Debt help system
  • Attending to any debt Review rejections (17.2 rejection) which will include
  • Notifying the consumer and credit providers and the rejection
  • Updating the NCR Debt help system
  • Compliance with regulation 25. Regulation 25 of the National Credit Act: If a debt counsellor finds that a consumer is not over-indebted and makes a finding in section 86(7)(a), the debt counsellor must provide the consumer with a letter of rejection

Regulated Cost – R300

Payment Due Upfront and in full

 debt-counselling-fee-structure---credit-salvage All Blogs - Credit Salvage

Step 3 – Debt Counselling Fees - Restructuring

The Fees under debt counselling are aligned to the outcomes of a full assessment of the consumers’ financial information and the following processes include:

  • Proposal preparation for credit providers’ perusal
  • Restructure the consumers' debt on the debt counsellors PDA profile
  • Negotiations with creditor providers which includes
  • Negotiate reduced instalments
  • Negotiate reduced interest rates
  • Reduce or change insurances
  • Submit final proposals to credit providers and the consumer
  • Drafting, submitting and supplying of debt counselling documents to attorneys to draft court applications.
  • Updating the NCR Debt help system
  • Attend to any transfer request from consumers
  • Attorney instruction to draft court applications
  • Filling of NCT applications in the cases of consent orders
  • Attending to withdrawal request from consumers (17.W process)

Costs – The restructuring fee is equal to the distributable amount of not more than R8000 for a single applicant and R9000 for consumers married in community of property

In other words, the first restructured instalment will get paid to the debt counsellor. The above limits apply

Example.  Sally is in debt and she earns R10 000pm after statutory deductions. She pays for rent school fees, transport and other expenses and also for living expenses. In total Sally, pays R4000 for all her debt.

Sally applied for debt review and her debt got restructured down to an amount of R2000. Sally is happy with this monthly amount as she now can afford to pay her living expenses and pay her debt. Sally made her first debt Review payment of R2000.

Payment Due: This first payment will get paid over to the debt counsellor for services rendered.

Debt counselling Guide

Step 4 – Reckless lending FEE

A debt counsellor will attend to Reckless Lending Assessments and investigations and supplying reckless lending documents to attorneys to draft affidavits on the assessment outcome

Cost: R1500.

Read More about reckless lending in our Reckless lending Blog Article and FAQ pages

Debt Counselling Fee Structure page 2 201

Step 5 – After Care Fee

Debt counsellors will track your debt counselling progress and attend to the following while you under debt review.

  • Form 17.2
  • Review of the consumers' financial situation
  • Attend to any payment queries
  • Attend to the clearance process which includes securing paid up letters
  • Attend to the 17. W process. (withdrawal from debt counselling by the consumer)
  • Attending to the update of the NCR debt help system

Costs: 5% of the distributable amount or an amount of not more than R450 per month.

When we go back to the Sally example: her new restructured amount to pay her debt is R2000. For the debt counsellor to track and attend to any queries Sally Aftercare fee will be 5% from R2000

= R100 aftercare fee.

Aftercare fees will never exceed R450. If the amount exceeds R450pm query the amount with the debt counsellor and the NCR.

Payment Due monthly will get deducted from the debt Review restructured amount.

Step 6 – NCT Submission Fee

A debt counsellor will submit your debt counselling application with the NCT to get a consent order.

Costs R500 once-off and this is excluding the NCT filling fee. Currently, the NCT filling feeR200

Step 7 – Attorney Fees

The debt counsellor will appoint an attorney. We don’t make use of attorneys as we file with the NCT to save you costs. Should we need to approach the courts then this will be discussed up front and we will only proceed if you agree.

It is important to distinguish between debt review and administration. The above fees are for debt counselling and not for administration




Vehicle Repossessions - Credit Salvage 2019

Vehicle Repossession Credit SalvageCar Repossessions – The process and what to do if faced with repossession.

Whether you use a car to get to work, school or your local Checkers or Pick N Pay, your car is a real necessity. Cars have always been an essential requirement in South Africa where the public transport system is not always accessible for all.

The truth about purchasing a vehicle with banking finance is that the credit provider holds ownership of the vehicle until the financing is repaid in full. Missing payments due to unexpected emergencies or circumstances can lead to the credit provider repossessing the vehicle.

What is vehicle repossession?

When you buy a vehicle on finance you will agree to certain terms and conditions. Signing this agreement for vehicle finance you commit to repaying the financial institution over a certain period, at a specific interest rate. Defaulting on this agreement will allow the credit provider to repossess the vehicle and sell it to recover the outstanding fees due.

Most credit providers will start with the repossession process after the vehicle finance account is in default for 75 to 90 days. When the credit provider comes knocking on your door demanding the repossession of your vehicle, it is beneficial to have the relevant information about the repossession process. This knowledge will help you negotiate the way forward in this incredibly stressful situation.

We have compiled the process below to assist you through this anxious and worrying circumstance.

Contact us today so we may help you safeguard and defend your moveable assets against repossession.

The Repossession process!

Warrant of Execution or Court Order: To repossess your vehicle due to non-payment the credit provider must get a court order first! This is also known as an execution warrant. This execution warrant is in effect an order from the court to inform or instruct you that the credit provider can take possession of your vehicle. Some credit providers will send out collectors to your home or office to offer you the opportunity to surrender the vehicle. It is important to note that these collectors cannot compel you to return your car without a court order.

If you find yourself in this situation you would need to contact us as soon as a collector arrives at your home or office to repossess your vehicle.

Voluntary surrendering: To save on expensive legal fees you may opt to voluntary surrender the vehicle. If you are unable to repay the vehicle you can return the vehicle to the relevant financial institution. They will give you a written estimate of the value of the vehicle and sell it on auction.

There is no guarantee the credit provider will be able to sell your vehicle for the outstanding amount due. You would thus be held liable to settle any shortfall. This shortfall may be repaid over a period of time if the credit provider accepts an acceptable repayment arrangement. If the vehicle gets sold for more than the outstanding amount the credit provider will pay you the difference, though this scenario is rarely the case.


The bank repossessed my vehicle – What happens next?

Your car gets sold on Auction

Once the credit provider has taken your vehicle, they will attempt to sell it on auction. Before auctioning the vehicle, the credit provider in most instances will offer to sell the vehicle to you at the full outstanding amount due. Should you not be in a position to buy back the vehicle it will get auctioned.

Shortfall amount

The sale of the vehicle might not cover the full amount owed to the credit provider. You will be liable to repay any shortfall. This shortfall amount can be repaid in monthly instalments only if a suitable payment arrangement is in place and agreed upon by the credit provider. The Shortfall amount in most cases can form part of the debt counselling process.

Refusal of the consumer to repay the shortfall amount

  • Should there be a shortfall amount and the consumer refuses to pay, the following options are available to the credit provider:
  • The credit provider will get a Court Order or Warrant of Execution against the moveable assets of the consumer. This process involves the seizure of the consumers’ moveable assets. These moveable assets will get auctioned off and the proceeds credited for the outstanding balance due to the credit provider.
  • Garnish orders – the credit provider will get a garnish order to debit the consumers' salary with a specific amount until the shortfall amount is repaid in full.
  • You will get listed with all the credit bureaus as a default payer.


The best interest for a consumer is to prevent a vehicle repossession

Repossessions are stressful and can turn out to be very costly. You are not guaranteed that your vehicle will get sold for the outstanding amount. You will rarely be able to walk away without incurring extra costs after your vehicle gets repossessed.

It is important to avoid vehicle repossessions at all costs. Debt Counselling will protect your assets against repossession. Apply for Debt Counselling as soon as you are unable to make the relevant monthly instalment.

A debt collector or credit provider agent wanting to repossess your vehicle without a court order

Contact a Debt Counsellor as soon as an agent from the credit provider visits you at your workplace or home. Some collection agencies who act on behalf of credit providers might try and mislead consumers into thinking that their vehicle is being repossessed. The debt collector will attempt to get you to sign a voluntary surrender document. If the debt collector hands you a form that is not a court order, it is most likely that the document is an agreement to surrender your vehicle.

Stay calm, polite and refer the matter to your Debt Counsellor as soon as possible. Your Debt Counsellor will tell you what to do and will deal with the Credit provider regarding the vehicle repossession.

We want to reiterate that it is important not to sign any documentation and refer the matter to your Debt Counsellor.

The problem with most consumers facing this stressful predicament is that they land up suffering emotionally as well, the psychological term for this is “The Ostrich syndrome”. This is best used to describe consumers who are avoiding contact or communication with the credit provider and describes the behaviour where consumers proverbially ‘stick their heads in the sand’ and ignore the problem they get faced with.

Please do not hesitate in contacting us if you are in trouble with paying your creditors.

Disadvantages of getting your vehicle repossessed

  • Extra expensive Legal fees
  • Unnecessary stress on your family and marriage
  • Vehicle getting sold at a public auction
  • No guarantee the financial institution will get the market-related price at auction. This will create a shortfall amount
  • A default gets listed at the credit bureau, making it difficult to get any vehicle finance again for the first 6 to 12 months after the repossession

Other insightful articles worth reading:

Debt Review Process - Step By Step Guide 2019

Debt Review Process 2019 Credit SalvageDEBT REVIEW PROCESS - STEP BY STEP GUIDE 2019

If you’re ready to take your first step to pay off debt, debt review and debt counselling with us may be the perfect solution for you. Debt review is a service or product that helps consumers get out of debt. Depending on your situation, debt review and debt counselling may be the best way to assist you to get out of debt. Most individuals will repay their debt in three to five years. Others have managed to repay their debt in as little as a year.


Here’s how our debt review and debt counselling service offering can help you pay off your debt. First, you will work with our trained debt counsellors to check your financial situation. We will make a budget that you can live with while you pay down your debt.

You will pay all your debts with an affordable instalment. Instead of making monthly payments to multiple creditors, you’ll make one easy payment to our payment distribution agent. The PDA will pay your creditors on your behalf based on our restructured instructions.

This is important for these reasons:

  • The easy management of your finances
  • Helping you reduce stress
  • Debt Counselling will make things easier to stay up to date payments.
  • Reductions in interest rates, finance charges, late fees, and over-limit fees.

In this way, our debt review and debt counselling service can reduce the amount of money you owe and shorten the time it will take to pay your debt off. Please visit our debt counselling repayment calculator to get a rough estimate of the amount of time it will take you to repay your debt.


Find a debt counsellor to handle your debt review process.

South Africa, there are many options when it comes to choosing a debt counsellor. All debt counselling firms get regulated by the NCR and fees are set at a certain ceiling depending on the amount of debt. Find a reputable debt counsellor and investigate consumer complaints websites before signing up. We have helped hundreds of clients and we have a long list of customer testimonials. We work for your benefit and not for your credit provider.

Check if the debt counsellor is active and registered with the NCR

National Credit Act requires a Debt Counsellor to have a certain qualification and registered with the NCR. Debt counsellors are not allowed to provide debt counselling services if not registered. Making use of unregistered debt counsellors will cause harm and one might stand a chance in losing monies paid.

We are a compliant registered debt counsellor and have been in business since 2006. To check if a debt counsellor is registered you may consult the NCR website by following this link National Credit Regulator 

Credit Salvage Form 17

Complete an application for debt review (FORM 16)

Once you are happy with your debt counsellor and you have investigated if the debt counselling firm is active and registered, the debt counsellor will provide you with an application form. You will need to complete this application in much detail as possible. This form is what we call From 16.

The debt counsellor will conduct an in-depth financial analysis of your finances. This analysis is to determine the extent of your debt and to investigate if you are over-indebted.

With the completed form 16 you need the following documents

  • ID Copy
  • Power of attorney
  • Bank Statements
  • Account statements (if you have this available)
  • Salary advice slip/ pay slips.

The debt counsellor will use these documents to plan a suitable budget and plan a restructure proposal to pay off your debts. This restructured amount will make sure that enough money is available for living expenses.

Debt Counsellor will Assess if you are over-indebted

This is the process where a debt counsellor will check and determine if you are over-indebted and if you will qualify for the debt review process. During the process, the debt counsellor will investigate reckless lending.

The Debt counsellor has a period of 30 days to get all the necessary documents from the consumer and credit provider to make this determination.

To start the process for a free consultation and free assessment you may visit our get debt help page.

Notifying the credit providers of your debt counselling or debt review application

Within 5 days of receiving your application for debt counselling, your debt counsellor will notify all your credit providers of your application. This notification is form 17.1

This 17.1 notification will request balances from your credit providers and the credit providers will issue statements in the form of a certificate of balance. COB

The COB will have the following information

  • Name and Surname
  • Credit providers’ details including registration number
  • Account number
  • Account type
  • Outstanding balance
  • Monthly instalment
  • Interest rate
  • Arrear's amount
  • Insurance amounts

With this detailed COB statement, the debt counsellor will be ready to propose your repayment plan with credit providers.

Debt Counsellor declares you over-indebted or not over-indebted

With your income, expenses and certificate of balances, the debt counsellor will either declare you over-indebted or not over-indebted

A Form 17.2 notification gets sent to all your credit providers advising them that your application for debt review was successful.

Your application for debt review get decline

If the debt counsellor believes that you are not over-indebted a Form 17.2 notification gets sent to all your credit providers advising them that your application for debt review was unsuccessful. If you are not over-indebted, you will not be able to make use of the debt review or debt counselling process.

Your application for debt review gets approved and you get declared over-indebted

Once declared over-indebted the debt counsellor sends a proposal outlining the following information:

  • Name of the Credit provider
  • Account number
  • Balance
  • Original instalment before debt review
  • Original interest rate before debt review
  • Proposed new restructured instalment
  • Proposed new interest rate percentage
  • Cascading of how the account will be repaid
  • Number of months to repay the debt under debt counselling

The Credit providers will respond by accepting the proposal or they would issue a counteroffer. This process takes ten business days

Debt Review Stops legal Action - Credit Salvage

Restructuring of your debts and a consent order

Within 60 days of receiving your application, the Debt counsellor will approach the courts to get a consent order.

Your credit providers will stop any legal action against you, and you will enjoy protection for the first sixty working days

Paying your reduced instalment to a Payment Distribution Agent

You will pay your restructured amount to a payment Distribution agent who will distribute your restructured instalment as per the proposal and/ or court order

Please note that debt counsellors are NOT allowed to request any fees from you. You will pay your restructured instalment to our appointed payment distribution Agent (PDA) while the debt review process is active.

Credit Salvage Clearance Certificate

Clearance certificate

You will now pay a reduced instalment until your debt gets paid off

Once you have settled all your debts under the debt counselling process the debt counsellor will issue you with a clearance certificate and will notify:

  • All credit providers
  • Credit bureau
  • National Credit Regulator.

 The debt counselling indicator will then get removed.

Other Interesting and insightful articles related to the debt review process:


Quick Links


                              Home       About Us       Debt Counselling       Credit Clearance       Resources       Calculator       Blog      Client testimonials                                 


Right Click

No right click