What do I do if I am under debt counselling and a credit provider contacts me

Being in debt can be a stressful and overwhelming experience. If you've reached the point of seeking help, you may have come across debt counselling, also known as or debt review. It is potentially one of your best options and can be a lifesaver if you’re facing asset repossession.

The Debt Counselling process protects you from creditors and their demands. The law regulating the process indicates that creditors may not contact you directly and should contact your debt counsellor if they have requests or questions.  

But what happens if a credit provider contacts you once you’ve entered debt review?

It’s nothing to panic about! Here, we explain everything you need to know and outline what steps you should take if you find yourself in this position.

What is debt counselling (debt review)?

Let’s ensure we’re clear on what debt counselling is.

Debt counselling, also known as debt review, is a formal process overseen by the National Credit Regulator (NCR) in South Africa. The process was introduced by the National Credit Act of 2007.

To sum up, a registered debt counsellor negotiates with your creditors to lower your interest rates and extend your repayment terms. Once your new repayment amounts are agreed upon, your total repayment amounts will be consolidated. This allows you to make one affordable monthly payment that is distributed among your creditors. 

In most cases, it takes around five years to complete the process, after which you will receive a clearance certificate indicating that all your debts are paid up.

While you’re undergoing debt counselling, you are protected from creditors.

Know your rights when it comes to debt counselling

When you're under debt counselling, you have certain rights that protect you from harassment and unfair treatment by creditors:

1. Protection from legal action: Creditors are legally obligated to cease any legal proceedings against you once you've applied for debt review. This means they cannot take legal action again you, such as repossession, garnishment of wages, or eviction.
2. Communication protocol: Credit providers must communicate directly with your debt counsellor regarding your debt repayment plan. They are not allowed to contact you directly once you’re under debt review, except under specific circumstances outlined by the National Credit Act.
3. Fair treatment: You have the right to be treated fairly and respectfully by credit providers. They cannot intimidate, harass, or coerce you into making payments outside of the agreed-upon debt review plan.

What can you do if you receive a call from creditors?

Despite the above protections, it's not uncommon for credit providers to continue contacting individuals under debt review.

This may happen because the credit provider has been slow to update your information on their systems, or because they are not following the rules.

Regardless of the circumstances under which they contact you, you should take the following steps:

1. Remain calm:

If you are contacted by a credit provider, remain calm. It's natural to feel anxious or stressed, but panicking won't help the situation. Take a deep breath and approach the situation with a clear mind.

2. Verify the identity of the caller:

Before divulging any personal or financial information, verify the identity of the creditor contacting you. Scammers sometimes pose as creditors to obtain sensitive information. Ask for the creditor's name, company, and contact details to ensure legitimacy.

3.      Inform all parties:

Explain to them that you have applied for debt review in terms of section 86 of the National Credit Act. Tell them who your debt counsellor is so that they can get in touch. If the credit provider asks for proof, send them your debt review protection certificate or NDA receipt, which you should have received.

Notify your debt counsellor immediately. Follow their guidance and instructions regarding how to proceed. They may advise you on the next steps or provide further documentation to support your case. They will handle the situation on your behalf and ensure that the creditor adheres to the legal guidelines.

4. Record and store everything:

Maintain a record of all communication received from creditors, including phone calls, letters, and emails. In addition, remember to note dates of contact, time, nature of the interaction, names, and contact details.

These records may be necessary if there are any disputes or violations of your rights.

5. Remember your rights:

Familiarise yourself with your rights under debt counselling, so you can confidently assert them if needed. Understanding the law will empower you to deal with creditors effectively.

6.  Avoid accepting new agreements:

Any changes to your debt repayment plan must be discussed and approved by your debt counsellor.

7.  Monitor your accounts

While under debt counselling, it's essential to remain vigilant and monitor your bank accounts and credit reports regularly. Ensure that all payments are being processed correctly according to the agreed-upon debt repayment plan.

8.  Know when to take a stand

If creditors do not stop harassing you, submit a complaint to www.ncr.org.za.

What if you have applied for debt counselling but have not yet started the process?

If you’ve applied for debt counselling but haven’t officially started the process yet, it’s essential to understand that you may not have the same legal protections as someone actively under debt review.

During this transitional period, you may still receive communication from creditors, and it’s crucial to manage these situations carefully.

While you’re waiting to begin the debt counselling process, it’s advisable to maintain open communication with your creditors. Inform them of your intention to enter debt counselling and request temporary relief or arrangements until the process is finalised.

Why are credit providers calling people under debt review?

On many occasions, credit providers sell their books of debt, which means clients can be harassed by another debt collector.

Debt collectors still must follow the National Credit Act. As such, you could report them if you felt is was necessary.

Coping with the stress of debt 

Debt can take a toll on your mental wellbeing. Here are some tips to manage the stress:

• Acknowledge your feelings. It's normal to feel overwhelmed, ashamed, or frustrated.
• Seek support. Talk to a trusted friend, family member, or therapist. There are also debt counselling support groups available.
• Focus on self-care. Prioritise healthy habits, such as exercise, good sleep, and relaxation techniques.
• Work on finding solutions. Work closely with your debt counsellor to create a realistic repayment plan and take proactive steps to improve your financial situation.

Remember, you're not alone. Debt counselling is a powerful tool to help you regain control of your finances and achieve debt freedom. By understanding your rights and taking care of yourself, you can navigate this challenging time effectively.

Being under debt counselling offers essential protections for consumers struggling with debt. If contacted by a credit provider while under debt review, remember your rights and take proactive steps to address the situation. By staying informed, seeking support, and prioritising self-care, you can navigate the challenges of debt with resilience and determination.