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A Fin24 user has been under debt review for the past two years and cannot understand why his debts keep on mounting. He writes:
I have a question which is worrying me lot. I have been under debt review for two years now. My bond and car is also included.
What I do not understand at all is that in June this year the balance on my car was R54 000 according to the statement I received. In July the statement showed a balance of R84 197.53, with about R31 056.93 added on as initial finance charges.
My question is: Why that now? Then it seems I will never ever finish paying off my car.
I'm even thinking of cancelling the whole debt review, because I'm having problem with my loan. The balance is way too high, almost double than amount I borrowed.
I need advice as to whether to terminate debt review or not.
Sophia Vorster of DevPro responds.
You should go and find out whether your debts are in fact being paid each month, because something does not sound right.
Because you pay fees each month to the debt review consultant, I would suggest that you go and see that person and insist that they call the relevant institutions and find out where the higher amounts come from.
That will prevent the debt review consultant from perhaps misleading you.
If you are present then the debt review consultant contacts the various institutions you can get a much more transparent idea of what is going on.
In general, under debt review, institutions cannot add more costs to the debt. The debt is "frozen" and is paid off.
Renée Marais, an independent debt counselor, also responds.
Determine if your debt counselor is registered with the National Credit Regulator (NCR).
He or she has to show you a certificate from the NCR with name, ID number and NCRDC number.
Do you have a court order granted in the Magistrate's Court and did section 103(5) of the Credit Act form part of this?
Did your debt counselor renegotiate for lower interest rates?
Rule 103(5) states that the debt at the time of debt review application as set out on the current outstanding balances from creditors may only double (interest and costs included) and thereafter only no additional costs or interest may accrue.
For example: If you owe Woolworths R2 000 at the time of debt review, it may only grow to R4 000 and then you pay off the R4 000 over a period of time.
Further more on the car, did you buy the car with residual value as this has a huge impact on the debt review and also what is the term the debt counselor proposed.
A vehicle should be paid off over a period of 84 months maximum.
Do you receive proof of distribution payments monthly from the DC/ PDA (Payment Distribution Agent) in order for you to determine if payments are made towards the debt?
If you cancel debt review you will have to revert back to the original payment installments as per creditor and the interest and costs will have to be paid off also.
Please contact the NCR (www.ncr.org.za or 0860 627 627) or another debt counselor to investigate this for you. You can find one on the DCI portal – www.theDCI.co.za.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
I have a question which is worrying me lot. I have been under debt review for two years now. My bond and car is also included.
What I do not understand at all is that in June this year the balance on my car was R54 000 according to the statement I received. In July the statement showed a balance of R84 197.53, with about R31 056.93 added on as initial finance charges.
My question is: Why that now? Then it seems I will never ever finish paying off my car.
I'm even thinking of cancelling the whole debt review, because I'm having problem with my loan. The balance is way too high, almost double than amount I borrowed.
I need advice as to whether to terminate debt review or not.
Sophia Vorster of DevPro responds.
You should go and find out whether your debts are in fact being paid each month, because something does not sound right.
Because you pay fees each month to the debt review consultant, I would suggest that you go and see that person and insist that they call the relevant institutions and find out where the higher amounts come from.
That will prevent the debt review consultant from perhaps misleading you.
If you are present then the debt review consultant contacts the various institutions you can get a much more transparent idea of what is going on.
In general, under debt review, institutions cannot add more costs to the debt. The debt is "frozen" and is paid off.
Renée Marais, an independent debt counselor, also responds.
Determine if your debt counselor is registered with the National Credit Regulator (NCR).
He or she has to show you a certificate from the NCR with name, ID number and NCRDC number.
Do you have a court order granted in the Magistrate's Court and did section 103(5) of the Credit Act form part of this?
Did your debt counselor renegotiate for lower interest rates?
Rule 103(5) states that the debt at the time of debt review application as set out on the current outstanding balances from creditors may only double (interest and costs included) and thereafter only no additional costs or interest may accrue.
For example: If you owe Woolworths R2 000 at the time of debt review, it may only grow to R4 000 and then you pay off the R4 000 over a period of time.
Further more on the car, did you buy the car with residual value as this has a huge impact on the debt review and also what is the term the debt counselor proposed.
A vehicle should be paid off over a period of 84 months maximum.
Do you receive proof of distribution payments monthly from the DC/ PDA (Payment Distribution Agent) in order for you to determine if payments are made towards the debt?
If you cancel debt review you will have to revert back to the original payment installments as per creditor and the interest and costs will have to be paid off also.
Please contact the NCR (www.ncr.org.za or 0860 627 627) or another debt counselor to investigate this for you. You can find one on the DCI portal – www.theDCI.co.za.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
