What are the benefits of paying/settling my account?
– It is one less thing to pay a month which will result in more money to use on things you want to use it on.
– Regular payments and settlement may procure a positive reflection at the credit bureaus and an improved credit score.
– Regular payments are reported to credit bureaus and will make it easier to get credit when you need it.
– Creditors and debt collectors will cease contact with you.
– Less stress!

What are the consequences of not paying my account?
– Non-payment will be reflected on your credit profile at the credit bureaus.
– Applications for credit may be denied.
– If approved, you may have to pay higher interest rates.
– You may face possible legal action and you will be held accountable for the costs in this regard.
– Judgment may be granted against you which is valid for 30 years.
– Negative reflection on your credit report.
– Fees and interest will accrue until the full outstanding amount has been settled.
– You may find difficulty in securing employment because of your negative credit profile.
– More stress!

How long is a judgment valid for?
A judgment is valid for 30 years.

How long will a judgment reflect at the credit bureaus?
A judgment will reflect at the various credit bureaus for 5 years or until the outstanding balance is paid in full, which ever happens first.

What is prescription?
When a debt has been dormant and no acknowledgement has been made for a specified period of time, the debt may prescribe (or be extinguished). In the case of credit agreements, the applicable period is three years.

What is a bought account?
When a  company , usually a debt collection company (debt buyer) purchases your debt from the original creditor, the debt buyer becomes the new creditor and the debt is now owed to them as they have acquired the rights, title and interest in and to your account.

What is a Trace Alert?
A trace alert is placed on your credit report when a creditor or service provider has asked to be notified when any updated contact information is loaded onto your credit report as they are unable to make contact with you due to out-dated contact information.

Therefore, whenever you make enquiries with regards to new credit, those creditors will be alerted to this request and may affect your application negatively.

Can fees be added to my account?
Yes. According to the Debt Collectors Act, debt collectors “are entitled to recover from the debtor any fees or remuneration in connection with the collection of any debt.” Thus, collection fees can be charged in an attempt to recoup the outstanding amount. If legal action is taken, the Magistrates’ Courts Act or even the High Court Act will govern the fees being charged.

What is a Section 129?
In accordance with the National Credit Act, a credit provider and/or his representative must inform the debtor that the debt is in arrears for at least 20 business days and simultaneously make him aware of his rights to go and see a debt counsellor etc.

It is proposed that “the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date.”

A Registered Section 129 is usually the first step when legal action is contemplated or commenced.