A Fin24 user says debt counselling is working for her, but she has questions about certain implications. She writes:
When my husband was retrenched in 2008, I had only enough savings to keep us going for a short time.
Long story short, I decided to go the debt counselling route. It took more than two years for our debt counselling to go through to a magistrate.
I have a few questions:
Am I still liable to pay after care fees to the debt counsellor after the court order has been granted?
They have since not contacted me in any way and basically do not provide any service during this time that I am paying off debt.
The amount of R342 has never decreased at all over the past five years and I feel I could be using this money to add onto one of my existing payments.
My next question:
From what point in time are creditors meant to take your debt counselling payment restructure into consideration?
Is it from the time you are accepted on debt counselling or is it only once your court order has been granted?
There appears to be no definitive and clear cut begin time. This timeline affects the capital amount owed and determines for how long you need to pay back.
If your debt counsellor took two years to get a court order, you potentially gain additional interest charges.
My next question:
Why are the credit providers - specifically the banks - not providing me with a monthly statement?
I have asked, but have been told they don't provide this service, because I am under debt counselling and I need to phone and individually request these.
A study loan I took out for my son several years ago has now converted into a personal loan. Is this legal?
My bank has great technology, but shocking service and unheard of sympathy. They are lucky I have integrity.
Personally, debt counselling has had a positive influence on me. I have vowed to never again take out any credit for whatever reason.
When I need a new car, I will save for it and get a second hand one.
For the last five years everything we have bought has been paid for cash - and I am still here. I have survived.
With an unemployed husband sitting at home doing nothing, I took on a second job as I am short R4 000 each month. I have to make it work.
My entire incentive has gone to paying off debt. I started off with 13 creditors and have five left, of which one is the bond.
Debt counselling definately works if you are willing to make it work.
Renee Marais NCRDC1780, independent debt counselor based in Pretoria, responds:
Congratulations on taking control of your finances.
Consumers are liable to pay after care fees and payment distribution agent fees for the duration of the process and until such time as the clearance certificate has been issued.
Please note that your debt counsellor should have done a reassessment of your financial situation yearly and adjusted the payments as and when creditors were paid off.
Usually the smallest ones get paid off first and then the next in line and so on.
This should also have been discussed with you every time a creditor was paid in full and to ensure that you obtain the necessary paid-off letters from each of those creditors.
The debt counsellor is also required to monitor monthly payments every month and respond to letters from creditors and telephonic requests as well as be available to you for any assistance.
Telephone calls from creditors are a regular thing as payment distribution agents don’t always pay timeously and that causes late payments, for instance.
For the ongoing work, debt counsellors get paid the after care fee. The registered debt counsellor should have discussed all fees with you at the first interview, when you applied for debt review.
Debt counsellor doing his job?
If the debt counsellor took two years to obtain your court order, you need to know why.
If some of the creditors did not participate and it took longer, you need to contact the National Credit Regulator (NCR) on 0860 627 627 and have them investigate the matter.
If the debt counsellors simply took their time to obtain the court order, you also need to complain to the NCR on form 29 available and have them investigate.
Debt counsellors must ensure the notice of motion is served before 60 days have passed and then serve the court application. At that time the capital amount is usually fixed.
It can be enforced by the NCR on your behalf to reverse charges and interest not in line with the proposed repayment schedule that was added to your statement if applicable.
If your debt counsellor did not serve the notice of motion with 60 days as prescribed without good reason, the debt counsellor is not fulfilling his judiciary duty and can be held responsible.
Unfortunately, usually when a court order is granted, the capital amount owed is enforced, except if you took up the matter with the NCR to investigate.
The banks are required by law to provide you with statements upon request in terms of the National Credit Act 23 of 2005.
Section 110 states:
At the request of a consumer, a credit provider must deliver without charge to the consumer a statement of all or any of the following:
- The current balance of the consumers account;
- Any amounts credited or debited during a period specified in the request;
- Any amounts currently overdue and when each such amount became due;
- Any amount currently payable and the date it became due.
A statement requested in terms of subsection must be delivered within 10 business days, if all the requested information relates to a period of one year or less after the request was made.
Or within 20 working days, if any of the requested information relates to a period before the request was made.
Read section 66(1) (d) and Section 95 of the National Credit Act 34 of 2005 to determine whether the strict requirements, as set out therein, were complied with regarding FNB changing a student loan to a personal loan.
If you find that your bank is in breach of such sections you are allowed to refer the issue to the Banking Ombud to investigate the matter.
Debt counselling, as a process to take charge of your finances, is a very good process and has helped consumers country-wide to solve their debt problems in an efficient way.
The formal debt counselling process via the courts protects consumers and their assets and provides the finances to pay off debt, while you can still be able to pay for essential living expenses without incurring more debt.
* Renée Marais NCRDC1780 and Charl Marais NCRDC2241 are independent debt counsellors based in Pretoria. They are part of the Debt Counseling Industry.
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