What if I have been under debt counselling before?

March 23, 2017

Very often people undergo the debt counselling process without being 100% informed of how it works and what will be expected of them. It also happens, and I find this incredibly sad, that debt counsellors are unscrupulous, and walk away with an already financially constrained client’s money, leaving them in more trouble than before. Another scenario is that the dc wants to make as much money off the client, thus pushing up the monthly payment, where the consumer can’t afford the instalments anyway, so they default.

The NCR has started to clamp down on this, but unfortunately many consumers have been burnt and are understandably wary of this process. For me, as a dc, it is very important that the client fully understands what the process entails, and as such I do not enter into any agreement with him or her until they are fully comfortable that all questions have been answered.

It has always been my point of view that the client is the one that needs the help, and I am in a position to assist. As such I attempt to reduce the monthly repayment fee as much as possible, even knowing that a client can afford more. For instance, when a client comes to me and can afford R3,500.00 monthly repayments, but I can work out a proposal that solves with R3,000.00, I would advise that we begin with R3,000.00, and use the extra R500.00 to accept any counter offers that the creditors may send. That way I know that my clients are not dipping into other monthly living expenses that they get to the point where they have no choice but to default. Should we not need the extra R500.00, the client can then choose to either use it towards his/her debt review, or to use it for other living expenses. The point is, my fee is paid from the first payment, and if the first payment from the client is R3,000.00, then that is the payment I accept.

This is not always possible, but it is my intention with each and every client to keep the monthly repayments within what they can afford.

Furthermore, I constantly communicate with my clients, sending them copies of all documents that gets sent to their creditors as well as all replies. Before a proposal gets sent out, I ask my clients to confirm that they agree with the amounts and the terms. Not knowing what is happening creates insecurity and fear, especially if you have been burnt before. It is, and always remains, my client’s life that I am dealing with, and I respect him/her enough to understand what is happening and to be given an opportunity to ask questions when something does not make sense.

Debt counselling is truly something that can assist many people in financial distress, if handled properly and ethically, even if you have been under debt counselling before.

Please feel free to comment or ask questions regarding this


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StatsSA released statistics on 19 April 2012 showing a year-on-year decline of 4.4% in civil judgments for debt in February 2012.

The number of civil judgments recorded for debt decreased by 14.2% for the three months ended February 2012, compared with the three months ended February 2011.

Consumers should use debt review to salvage their financial situation before it is too late. Debt review will prevent unnecessary legal costs and assist in repaying the debt in a cost-effective manner.

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Debt Counselling Fees

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Debt Counselling Fees have been under the spotlight in recent weeks due to the North Gauteng High Court upholding a ruling by the National Consumer Tribunal in the deregistration of Christoph Bornman as a debt counsellor.

The NCR investigated Mr Bornman, and found that he contravened the credit act by

·         Deducting fees to which he was not entitled

·         Receiving After-Care fees for services he did not provide

·         Failing to follow the debt review process prescribed...

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South Africa’s rising household liabilities

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Business Day reported on a household wealth index that indicated that household liabilities are rising faster than asset growth in South Africa. According to the survey, which was undertaken by Momentum Insurance and University of South Africa, there is an increased need for financial education and comprehensive financial advice.

One of the biggest concerns is that unsecured credit is being used to fund consumption rather than acquire assets, and the recommendation from Prof van Aardt of th...

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Did you know…

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Evolution of Debt Counselling

April 22, 2012

When I started as a DC in 2010 it was possible to send a creditor a repayment proposal saying that the client has lost his/her job, and that a moratorium be placed on the accounts in question. Whether the creditor agreed with this or not did not matter, as long as the matter was set down in a magistrate’s court. We were also under the impression that legal action only commences once a summons has been issued, so all accounts could be included as long as summons was not issued…

Since then...

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Insurance and Debt Review

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It has recently come to light that insurance companies can repudiate insurance claims on the basis of having adverse listings on a credit record.

A consumer’s vehicle was irreparably damaged, and even though the vehicle was comprehensively insured and the monthly premiums up to date, the claim was repudiated on the basis that when the consumer took out the policy she failed to disclose any adverse listings. The consumer’s defence was that she was unaware of these listings, but the insura...

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About Me

I have been in the debt counselling industry since July 2010, and have lived through the trials and tribulations of the past year. I have a very good understanding of what is happening in the industry, and through this blog am trying to make all relevant information available to consumers.

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