Pros of administration order

Pros

A judgment 's effect on unpaid debt or summons, is halted. This means that, unlike the credit provider approaching the court, you and your administrator can decide what amount to repay
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Once you're in the debt trap

Administration Order,

Section 74 of the Magistrate 's Court Act requires persons with no financial assets and debts of up to R50 000 to apply to the courts for an administration order. The, order temporarily protects debtors (consumers) from their creditors and enforces a repayment program that allows lenders to repay their debts and still have enough money for living expenses.

An administration order is a valuable option to protect and assist consumers to repay their debts orderly and affordably and enable them to re-enter the economy with dignity on discharge

It places the management of their financial affairs in the hands of debt administrators. The administrator receives your income and, after deducting an amount to cover your living expenses, distributes the rest proportionately among your creditors.

Consumers should be aware that it is a costly alternative because it could cost up to R1 200 to obtain the administration order. Administrators then take 12.5 % of the monthly payments for their services while the employers take another 5% “management fee” because they must pay the administrator the designated sum every month

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What is an Administration order?

Court Order

This is a Court Order issued by the Magistrate to ensure that you retain enough of your monthly income to support yourself and your family i.e. the people who rely on you.

Easy and fast answer

The Magistrate orders a debtor (you) to repay his debt in monthly installments that you can afford..

No additional papers

Which means the Magistrate decides how much a person can afford to pay back on the total debt each month. He does so by deducting the requisite monthly expenditures such as food, school fees, clothing budget, loan, bond and/or furniture shop repayments from a person's salary.

Secure financial services

The instalment must be paid to the court-appointed Administrator.

Good investments

The Administrator pays the money into a Trust Account and every 3 x month the Administrator pays the person’s creditors until all the Debt has been paid.

Accumulation goals

If all the debt has been settled, the court issues a Certificate that all debt has been fully paid.

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