The cost of debt review | Fin24
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The cost of debt review

Apr 11 2013 08:13

I want apply for debt counselling and would like to know the following: 

  • How much are the fees that I have pay to Payment Distribution Agents (PDAs); 
  • Are the fees legalised; 
  • Will my car under finance be included; and
  • If all my other debt is cleared except for my car, will they issue a clearance certificate or only after I settled my car?

I still owe quite a lot on my car and want to trade as soon as I clear all my other debt. 

Friedl Kreuser of 6cents, a division of Summit Financial Partners responds: 

Firstly, with regard to fees, The National Credit Regulator has issued guidelines on all fees that can be charged under Debt Counselling, which are available on their website. I have summarised the main fees below: 

Once-off fees: 

1.       Application fee of R50 

2.       Rejection fee of R300 if the consumer is found not to be over-indebted 

3.       Restructuring fee for creating a payment plan, which will be equal to the first instalment on the payment plan, or R6 000 (excl VAT), whichever is less 

4.       Legal fee of either R750 (for a consent order) or whatever the Debt Counsellor pre-agrees with the consumer for non-consent orders 

Recurring fees: 

1.    A monthly Aftercare Fee equal to 5% of the first instalment on the payment plan, or R400 (VAT excl), whichever is less 

2.    A monthly PDA fee equal to 3% of the first instalment on the payment plan, but never less than R50 (VAT excl) and never more than R500 (VAT excl). 

Secondly, with regard to the financed car – all debt must be included under debt counselling, unless a specific credit provider has already started with legal action. 

A consumer will remain under Debt Counselling until all the debt is paid up, or he/she chooses to withdraw. 

Unfortunately, the National Credit Act only specifically allows a Clearance Certificate to be issued once all a consumer’s debt has been paid off. 

Consumers can, however, choose to withdraw from Debt Counselling when they have paid off all debt other than their asset-backed loans. 

The only real risk is that they will again be expected to pay the original instalment and interest rates on their remaining debt but, since all their other debt will have been paid off, they should be able to afford the original instalment, or more. 

- 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. 



debt counselling  |  money


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