We’ve all seen them by now, posts on social media talking about new High Court Rulings, pictures of Pres. Ramaphosa smiling about the new debt relief process, happy people because government has written off their debt, Remove debt review, or debt counselling listing… The list goes on! Guess what, THEY ARE ALL FORMS OF PROHIBITED ADVERTISING!
The National Credit Regulator has issued a circular to all players in the credit market warning about these adverts and demanding that people immediately stop with these prohibited forms of advertising. These types of adverts tend to lure people into signing up for services that they believe will offer one sort of help, but unknown to the consumer, by the time it’s too late, the advertiser has locked them into something different, OR WORSE, taken fees for work that doesn’t even help.
You will see all types of promises happening in these adverts, unfortunately, these promises are often blatant lies or misleading, for example: –
- Removal of Debt Review flag
- This can ONLY be performed by a Debt Counsellor issuing a clearance certificate (Form 19) once all your debt has been settled.
- Legally write off up to 63% of your monthly debt repayments
- There is NO legal basis for this type of promise and if you ask the person offering it to give it to you in writing, they will not! What does this tell you?
- Recent High Court ruling writes off debt for consumers
- There is no recent High Court ruling that does this!
- If someone is offering you this, ask them for a copy of the judgment to see it for yourself! They will not be able to provide it.
- “Free service”
- How are they in business if they are offering this service for free?
It comes back to the old adage, if it sounds too good to be true, it probably is.
Be careful, a properly trained and registered debt counsellor is the ONLY person who is legally allowed to negotiate with your credit providers for the restructuring of your debt, and only if you are over-indebted. If you are dealing with someone, ask them for their full names and NCR registration number. Take the time to check them on the NCR database to make sure that they are registered. If they aren’t, or cannot provide you with the number, RUN!
Debt Counselling has been given a bad name at times, and this is often because of actions by these people looking to take advantage of people who are desperate. This is a GOOD and valid process, yes, it can be frustrating, yes it can seem like it takes forever, yes you can feel annoyed at times, BUT IT’S THE BEST PROCESS to help an over-indebted person get their debt repaid, at installments that they can afford.
Here are some hints to help you dodge the dodgy’s and to make a success of your Debt Counselling pathway.
- Research and find a debt counsellor that you are comfortable with
Look at resources like the NCR list of Debt Counsellors, Check on Facebook or Google for DC’s around you, Speak to friends and family.
- Meet your debt counsellor
This can be done in person, but with the current risks relating to COVID-19, it is also possible to do via telephone call, video call, WhatsApp, or any of the other video calling tools available.
- Be open and honest with EVERYTHING with your debt counsellor
Disclose ALL of your income and expenses, your debt counsellor can only create a proper working plan for you if they know what your personal situation is. Debt Counselling is not a one-size-fits-all process, it is specifically catered for you and your situation and needs.
- Pay the instalment that your debt counsellor calculates is affordable
Make sure that you pay this amount EVERY month. Skipping or short-paying puts you in default and your creditors can then proceed against you directly. You also lose the benefits of any reduced installments, etc.
- Check your court order and distribution statements to make sure payments are going to the creditors correctly
You should receive a statement from the PDA every month, check that to make sure that your payments are being made in terms of the court order/agreements reached with the creditors. It still stays your responsibility as the consumer to make sure that payments are correctly made. IF THERE IS A PROBLEM, GET IN TOUCH WITH YOUR DEBT COUNSELLOR
- Check your creditor statements to make sure they are receipting the payments from the PDA
The PDA distributes bulk payments to your creditors and then the creditor needs to receipt it to your account. There are some occasions where a payment doesn’t reach the account (stuck in suspense, changed account number at creditor, etc.). It’s always your responsibility to ensure that payments are being receipted by the creditors. Take your statements from your creditors and check them against the distribution statement from the PDA. If there is a problem, GET IN TOUCH WITH YOUR DEBT COUNSELLOR URGENTLY.
- STICK IT OUT! Often a consumer gets frustrated and “steps out” of the process. THIS WON’T HELP!
– You will stay listed as being under debt review and nobody can release you from this
– You will still need to settle your debt
– You will still need your debt counsellor to issue a clearance certificate
- Work with your debt counsellor, advise of any changed circumstances
If something changes in your life, speak to your debt counsellor, let them advise you of the best course of action.
- Pay more WHENEVER you can
Your debt is like a mountain blocking your way, the only way to get past it is to pay it off. You have already taken the first step by approaching a debt counsellor and getting your repayments down to an affordable level. The thing is, if you want to get over that mountain sooner, you must take bigger steps! Take those steps by paying any extra funds to the PDA for distribution to your creditors whenever you can. Before you know it, you will be over that mountain and feeling great!
The circular from the National Credit Regulator is available for you to download below.
Feel free to ask any questions in the comments.