Consumers were reminded recently by the National Credit Regulator that no debt counseling is offered for free. Consumers need to be aware of this fact and the associated costs. The following fees have been set by the NCR for debt counseling:
- Application fee: R50.00 (50 rands), payable before the assessment begins. Payment must be made upfront and in full.
- Administration fee: Three hundred rand (R300.00), per debt counseling application. Payment must be made upfront and in full.
- Attorney fees: These are to be discussed with the attorney, and communicated with consumers when they apply for debt.
- The maximum fee for restructuring is R8000.00 per applicant.
Consumers married in a community of properties pay a restructuring fee equal to the distributable amount, or a maximum fee of up to nine thousand rands (R9000.00).
After the restructuring documents have been submitted and drafted by the debt counselor, the restructuring fee is payable once only.
- If the consumer or the debt counselor feels reckless lending has occurred, they will be liable for a one-time fee of R15,000.00 (R1500.00).
- Aftercare fee: This is a monthly payment that is due after the second (2) months of debt counseling. The fee is equal (five%) 5% of the distributable sum up to a maximum of four hundred fifty rands (R450.00).
- NCT Submission Fee -Submission to the National Consumer Tribunal for R500 (exempt from NCT filing fee);
- After the restructuring is completed, consumers can make payments to their credit providers directly or through a registered payment distribution agent (PDA).
- After paying the application fee and administrative fees, consumers should request a receipt from their debt counselor. It is against the law for debt counselors to collect and distribute funds from credit providers.
Consumers are encouraged to ask their debt counselor for information about how they will restructure their debts before signing up for counseling. Consumers should request all documents related to debt counseling, such as the application form, restructuring plan, and court order, once they have signed up.
NCR once again stresses the importance of debt counseling only be done by registered debt counselors with NCR. They must also have a certificate showing their names and “NCRDC” numbers. The proof can be requested by consumers.
It is important to keep your contact information, names, and physical address of your debt counselor readily accessible.
Consumers can get a list of all registered debt counselors on www.ncr.org.za. Alternatively, consumers can call the NCR on 0860 627627
Debt counseling is often criticized. This is not due to the process for debt review, but because of the inept and unregistered debt counselors.