The difference between Administration Orders and Debt Review

What is the difference between an Administration order and Debt Review?

 

It is important that you know where the two processes originate from to understand the difference in results. Administration Orders are granted in terms of Section 74 of the Magistrates Court Act of 1944. It has a place in modern debt solving, especially where there is already a judgement taken against the Consumer or a Garnishee Order granted against their salary, but it is important to note that the Administration Order itself is also a court order against the Consumer and therefore it does have to be rescinded eventually before the Consumer will be credit worthy again. Debt Review on the other hand, like the Consumer Protection Act is aimed at consumer protection and falls under the National Credit Act of 2005. This act was specifically written to (and I’ll quote from the act) “prohibit reckless credit granting (&) to provide for debt re-organisation in cases of over-indebtedness”. Here the order is granted for the Consumer.

Often we can see huge differences in the results of the two repayment plans. Debt Review in conjunction with the new Code of Conduct promoted by the NDMA lowers the interest rates of the credit agreements and aims to get the consumer out of debt in the concession period of between 3 and 5 years. Under Administration orders there is no such objective in place and often we see Admin orders running to 7 years, which is a very long time for interest to accumulate.

Most importantly, Debt Review leaves you with an improved credit score and a perfect credit report returning you to complete financial wellness.

It is always advisable to speak to an industry specialist before making your decision. Fill in your details and one of our consultants will go through it with you in more detail.

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