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Media Info
 South Africa needs 2 500 more debt counselors to cope with consumer crisis
20 August 2008
South African needs 2 500 more debt counselors to cope with the needs of more than 6m indebted consumers, who are losing homes at the rate of 2 000 a month and 6 000 cars a month.
"At present there are only around 500 registered debt counselors in terms of the National Credit Act, of which more than two-thirds are under the umbrella of Consumer Assist, but the debt crisis is so serious that many more are needed," Andre Snyman, CEO of Consumer Assist said.
Ulande Janse van Rensburg a debt counselor with Consumer Assist - which is the largest umbrella organization for National Credit Regulator approved counselors - says: "You have to have a lot of compassion to do this job, many people who come to us are in tears or so anxious they will call a couple of times a day. One client tried to commit suicide three times and his psychologist would call from hospital and ask us to speak to him and assure him that we had his debt situation under control.
"Many of the people who contact us aren't in trouble because they overspent, for some their salaries haven't kept up with inflation, or someone in their family became very ill or they lose their job and then the people who gave them easy credit start hounding them. Some creditors phone people at 10.30pm at night or 6am demanding payment."
Consumer Assist runs a free helpline 0861 21 22 23 and website www.consumerassist.co.za with an interactive debt calculator on site, it does not retain information entered by consumers but can rapidly let a consumer know if he or she is over indebted. If the consumer wants help an email is sent to the closest debt counselor in his or her area who will then contact the consumer.
"Being in debt is like suspecting you have a terminal illness, " Snyman said, "sometimes people become so frightened of the potential diagnosis they delay going for help until it's too late, with everything physical health or financial health, the earlier you go for help the better the chance of a happy and successful outcome.
"Take the real case of a man who came to us who owed R36 894, he was paying off R2 950 a month but he was being clobbered by a growing mountain of interest rates which on that debt amounted to R9 499 and the whole debt was going to take him 34 months - almost three years to pay off.
"Many believe that repayment terms are always extended when placed under debt review but in this case the debt counselor restructured his debt so that his monthly payment dropped to R1 900 a month, which meant he had only R5 934 interest payable and the amount of debt owing dropped to R33 352 and it was all paid off in 18 months. He now has a clean credit record and has learnt the skills to use the money he saved to begin wealth-creating investments." (For the graph email mediaonline@global.co.za or call 011 646 7637)
People who go to National Credit Regulator accredited counselors (which all those at Consumer Assist are) may be required to pay only an initial R50 fee, any fees after that are included in the restructured and reduced payments. Although all fees are charged according to NCR rates, the consumer always has the right to negotiate with the debt counselor.
The following Q&A is provided as a service to consumers by Consumer Assist, further questions, facts and advice can be found on www.consumerassist.co.za.
Q: How does Consumer Assist choose Debt Counselors?
A: Consumer Assist Debt Counselors have to be approved by the National Credit Regulator. We only select those with accounting, banking or a strong finance industry track record to ensure our clients benefit from those with the highest integrity and broadest basket of top-notch financial skills.
Q. What is the difference between Debt Counseling, administration and liquidation?
A: * Debt Counseling: is where a Debt Counselor restructures installments to allow the consumer to pay his or her debt and meet his / her basic living expenses. Debts are paid monthly.
*Administration: is a legal process, where the installments are reduced, but creditors only receive payment every three months and the term of repayment is much longer than under Debt Counseling. Debt must be less than R50 000 to qualify.
* Liquidation: is a legal process where assets are sold to try and lessen the debt and the Court will appoint somebody to manage your finances. This is costly and you will be blacklisted for 30 years or until the Court declares you as rehabilitated.
Q: What fees does the consumer pay to the Debt Counselor?
A: There may be an initial R50 consultation fee. Other fees that may be payable to the Debt Counselor will be in accordance with the scales from the National Credit Regulator.
Q: What is a credit bureau report and how do I get mine?
A: A consumer can obtain a report that about their credit rating free of charge once a year by calling, Experian telephone 0861 10 5665 or Transunion telephone 0861 482 482
Q: Can I apply for credit while under Debt Review with a Debt Counselor?
A: No.
Q: Will I be black-listed if I apply for Debt Review with a Debt Counselor?
A: No. There is no black-listing but if the Debt Counselor finds the consumer to be over-indebted, they will add a flag to the consumer's credit record asking creditors not to lend the consumer money because he or she is already over-indebted. This will be removed once the debt has been repaid and when the consumer is no longer over-indebted.
Q: At what stage will my listing be removed from the credit bureau?
A: When you have paid off most debt excluding bonds, the Debt Counselor will remove you from Debt Review and notify credit bureaus that you are no longer under Debt Review or over-indebted. In other words, it is a sign that you have now learnt how to effectively manage your money.
Q: What will happen if a creditor lends the consumer money while the consumer is under Debt Review?
A: The Debt Counselor may refer the matter to court for a declaration of reckless lending and the court will decide what action to take.
Q: What accounts can be included in a Debt Review process with a Debt Counselor?
A: All credit agreements but not service agreements such as water and lights accounts or cellphone accounts. Any accounts on which judgment has been taken cannot be included.
Q: Can a consumer see a Debt Counselor if they have received a letter of demand?
A: A consumer should visit a Debt Counselor urgently if they receive a letter of demand. Debt Counselors can make arrangements on a letter of demand or warrant of execution but if a court judgment has been taken they cannot do anything.
Q: Can I still go under Debt Review if I have been black-listed by a creditor?
A: You can be placed under Debt Review at anytime, provided a Debt Counselor has declared you over-indebted.
Q: Must I continue to pay my accounts?
A: Yes. Creditors cannot take legal action for 60 business days after you apply for Debt Review but you must continue to make payments, because if your application is unsuccessful, you will be in default and the creditors can take legal action after those 60 business days.
Q: What proof will I have that I am under Debt Review?
A: You will be issued with a letter to this effect from the Debt Counselor
Q: When is a consumer under Debt Review?
A: After the client has successfully applied for Debt Review and the Debt Counselor has notified the credit providers.
Q: What happens I receive a letter of demand?
A: You have less than 20 days to see a Debt Counselor for help.
Q: If a consumer is not over-indebted, can they still apply for Debt Review?
A: No, although he/she can contact a Debt Counselor for advice on how to manage their money better and options will be discussed.
Q: Will the consumer still be able to use accounts and credit facilities?
A: No, once notification has been given to the credit providers, the accounts will be blocked from further use.
Q: If a consumer has additional cash, can the consumer pay the creditors directly?
A: No, there is a restructuring plan, in place. The consumer must contact the Debt Counselor to make arrangements.
Q: If a consumer is under administration can the consumer undergo Debt Counseling?
A: No, administration is a parallel legal process with similar outcomes. It has to be either administration or Debt Counseling
Q: Can a bank or credit provider provide Debt Counseling?
A: No, it is a conflict of interest. Consumer Assist is here to help you with our team of Debt Counselors to get you back on track, get rid of debt and start a new more prosperous life.
Q: What is the purpose of a Debt Counselor?
A: A Debt Counselor reduces payments to affordable amounts so that the client can meet his / her basic living expenses and pay off debt.
Q: What happens if a credit provider does not accept a repayment plan?
A: The Debt Counselor can calculate a new proposal or refer the matter to Court.
Q: What happens if a consumer has been incorrectly black-listed by a credit provider? Is there a way that this can be corrected?
A: Yes, the consumer can phone the credit bureau and request that the information be amended or approach a Debt Counselor for assistance.
FOR FURTHER INFORMATION www.consumerassist.co.za 0861 21 22 23 debt counselling call centre
Andre Snyman - CEO - Consumer Assist
aurelia.espag@consumerassist.co.za / 011 654 6018 (Languages: English, Afrikaans)
Source: MediaOnLine
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