The credit information amnesty implemented on 1 April 2014, has left many South African consumers confused about what the credit amnesty means for them.
22 August 2013
According to the National Credit Regulator (NCR), credit bureaus have reflected that to date, there are 20.08 million credit active consumers in South Africa. Of the 20.08 million South African consumers, only a small portion of 10.55 million consumers are in good standing and pay off their debt repayments on time.
Debt is becoming a widespread problem in South Africa, as a total of 9.53 million credit active consumers have impaired credit records. This means that these consumers have missed three or more monthly debt repayments or currently have an adverse listing, judgement or administration order.
More and more consumers are in need of a debt counselling agency to assist with solving their debt problem. In order to make sure that you are provided with the best possible assistance, choose the right debt counsellor by making sure they meet the following requirements.
1. The debt counsellor must be able to thoroughly explain the debt counselling process
Professional debt counsellors are to be registered with the NCR and are to provide valuable and up to date information about the debt counselling process. Debt counselling is a formal and closely managed debt solution that was implemented by the National Credit Act (NCA) in 2007 to ensure that South African consumers are ethically assisted with eradicating their debt.
2. Debt counsellors must protect your personal and financial information
Debt counsellors are to keep to your personal and financial information confidential at all times. DebtBusters ensures that all security measures are put in place and client’s information is kept 100% confidential and not sold to outside parties.
3. Debt counselling fees
Debt counsellors are allowed to charge various fees associated with the debt counselling process, but the they must be in line with the fee guidelines established by the NCR. According to the NCR, debt counsellors have the ability to charge a debt counselling application fee, rejection fee, debt restructuring/’debt counselling’ fee, as well as legal fees and a monthly after care/‘trailer fee’.
The NCR guidelines states that the debt counselling application fee must be approximately R50. DebtBusters application fee of R114 is divided into two components comprising the actual application fee of R57 and a credit report fee of R57. A credit report is a vital component of the debt counselling process as it assists DebtBusters financial consultants with adequately assessing the client’s financial situation. If the application process is successful, DebtBusters will ensure that all fees are worked into the restructured debt repayment plan. However, approximately R300 excluding vat, is allocated towards a rejection fee, if a client is not deemed over-indebted. DebtBusters charges a rejection fee of R456.
A debt counselling/debt restructuring fee is made to a debt counsellor as the first monthly debt repayment and cannot exceed an amount of R6000 excluding VAT. DebtBusters is in agreement with the credit providers they deal with and thus, client’s first debt repayment is given to DebtBusters. However, the debt counselling fee is effectively paid for by the client’s credit providers, as they are happy to receive their first debt repayment one month later. Therefore, instead of paying from month 1 to month 60, clients pay from month 2 to month 60 to the credit providers and DebtBusters gets paid in month 1.
The majority of debt counsellors charge a legal fee in order to pay the attorneys associated with processing the legal application accompanying debt counselling. Legal fees must be disclosed from the beginning of the process. DebtBusters charges a legal fee of R3500, which goes to their attorneys who then do the processing.
4. Debt counsellors must be registered with the National Credit Regulator
According to the National Credit Act (NCA) all debt counsellors are required to register with The National Credit Regulator. Debt counsellors will have a registration number, which can be verified by contacting the NCR on 0860627627.
5. Debt counsellors must use a reputable payment distribution agency
Debt counselling agencies are legally not allowed to pay credit providers on your behalf once your debt has been restructured, and are instead required to use a Payment Distribution Agency (PDA) that is registered with the National Credit Regulator. Hyphen Technology (Pty) Limited is the PDA used by DebtBusters.
6. Debt counsellors must be available to assist with queries or issues that may arise
Should any issues arise throughout the process, a debt counselling agency should be able assist you. DebtBusters expert financial consultants and client services agents are dedicated to assisting clients with queries.
DebtBusters is a reputable and trustworthy debt counsellor dedicated to assisting South African consumers with eradicating debt. DebtBusters is at the forefront of the debt management industry and is currently the leading and largest debt counsellor in South Africa, servicing the needs of more than 20000 satisfied clients.
With over 200 expert consultants, DebtBusters produces work of the highest quality and delivers excellent service. DebtBusters strives to proactively serve clients by helping them understand and meet their financial goals. DebtBusters believes is giving South African consumers a second chance to build a brighter financial future and contribute towards wealth generation in South Africa.
For more information about debt counselling and other debt management services contact DebtBusters today on 0869990606 or email email@example.com