A Fin24 user recently made an impassioned plea for help with her debt review. Here is an excerpt from her letter:
I appeal to you to assist me with my debt review matter. I have not once missed a payment.
to the creditors I defaulted in payment. This is completely incorrect,
the unallocation of payment was not caused by me whatsoever.
the debt counsellor confirming at the beginning of this year and
towards June/July that all my accounts should be settled and my debt
review finished in July 2012, to my horror this is not the case.
Click here for the full letter.
Clark Gardner, CEO of 6cents.co.za and Summit Financial Wellbeing, responds:
Dear Fin24 user,
I do sympathise with your situation as it is a true reflection of the real challenges with the implementation in the debt counselling industry.
The challenges are brought about as a result of many blind spots in this section of the National Credit Act (including limited powers provided to the debt counsellor in terms of reducing interest and prescribing affordable reductions in contractual instalments), creditors wanting to recover as much as possible, consumers having limited means and some debt counsellors not having the necessary skills to execute on the required duties.
The debt counsellor's duty is, in our opinion, as follows:
• Facilitate a reduction in contractual instalments to an affordable amount between creditors and the consumer;
• Ensure the balances claimed are accurate, valid and complete;
• Obtain an order from court or the National Consumer Tribunal; and
• Instruct and manage the PDA to deliver accordingly .
It seems your debt counsellor may have delivered on most of his or her duties but now may be experiencing much resistance from credit providers wanting to claim more than is owing.
I wish credit providers in this case would acknowledge they are part of the reason why the consumer is overindebted and sacrifice some interest and fees accordingly.
The DCRS rules recently established by the industry, including credit providers, has enabled this and guaranteed greater cooperation between all the parties.
It is a rules-based engine that reduces contractual instalment to an affordable amount by reducing interest rates and extending term.
As a result, consumers have a far more effective solution and improved experience under debt counselling, debt counsellors have greater cooperation from credit providers and creditors automatically consent to repayment plans.
In terms of your challenges specifically, I am of the opinion that one would need to enforce the court order.
It should state quite clearly the instalment and number of payments that should be made; ensure this is enforced. You are welcome to send it to us and we will ensure this for you.
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