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