18 Jan SELECTING A DEBT COUNSELLOR
Debt counselling has helped thousands of South Africans get out of debt and achieve their long-term financial goals. Making the decision to break the debt cycle is an important first step – equally important is selecting the right debt counsellor for you and your unique situation. Here is a quick guide to help you make an informed decision when starting your journey to debt-freedom.
How would you like to communicate with your debt counsellor?
Broadly speaking, there are two types of debt counselling companies: one that offers face-to-face meetings between the consumer and the debt counsellor, and one that typically provides the service via the telephone or internet and the consumer usually deals with a consultant or agent to the debt counsellor. Personally, I prefer the first option, although many consumers may prefer the latter. I also believe that the ‘call centre’ type business model, as the second option is commonly called, provides an invaluable service to consumers who don’t have easy access to debt counsellors. In either model, it is very important that; as the consumer applying for debt counselling, you know who your debt counsellor is.
Do you know who will be handling your case?
Whether or not you are dealing directly with the debt counsellor, it is important to note that the National Credit Regulator (NCR) expects the registered debt counsellor to perform the key functions of each case that they take on. A debt counsellor may not delegate these key functions to anyone else. It is also unlawful for any person to provide the services of a debt counsellor or hold themselves out to the public as being authorized to provide such services if they are not registered as a debt counsellor with the NCR.
“It is also unlawful for any person to provide the services of a debt counsellor or hold themselves out to the public as being authorized to provide such services if they are not registered as a debt counsellor with the NCR.”
Obviously, in bigger companies, where they deal with large volumes of applications, the consumer may not necessarily be in direct contact with the debt counsellor. It is however important to know whether the debt counsellor or a subordinate is dealing with your matter.
Is the debt counsellor registered with the National Credit Regulator?
The most important thing to do when choosing a debt counsellor is to ensure that they are registered with the NCR. You can do this by going to the NCR’s website at http://www.ncr.org.za/register_of_registrants/registered_dc.php and typing in either the registration number (NCRDC****) or the person’s name. I would recommend that you search for a debt counsellor by first name or surname instead of the full name as the system unfortunately will search only for exact matches so if you exclude a second name, you won’t find the debt counsellor you’re looking for. You also have to click on the search button for a valid search, otherwise the system will disregard the information you inserted and just do a general search. It does, however, allow you to search by name of suburb, town or city which is helpful when you’re looking for a debt counsellor close by. The NCR website will not give you any insight to the effectiveness of a debt counsellor. They are tasked merely to inform the public of who is entitled to provide the services of a debt counsellor. This is up to you to establish.
Are your questions and concerns being addressed?
Regardless of your knowledge of debt review or finances in general, treat your initial contact as an interview. Is the person you’re dealing with listening to you? Are they explaining the process in easy to understand language or are they just saying a lot of too-good-to-be-true sales pitches? Do you walk away feeling that you have a better understanding of your own finances, the debt review process and how it can help you?
Have you received a restructured payment amount before full assessment has been completed?
Remember, debt review is a process. No debt counsellor can say with 100% certainty, at the start of the process, how the matter will turn out. Debt counsellors can rely on their experience to give you a high probability indication of the outcome but there are too many variables at the point of application to be able to precisely predict the outcome.
There are four bits of information a debt counsellor needs to perform even the most perfunctory of assessments – marital status, income, debt obligations and living expenses. Each of these factors play a role in determining the outcome of your application. If you have received an amount without the full assessment being completed, you may be given an incorrect repayment plan which could result in repossession of your assets.
Debt review is a complex process that should always be handled by an NCR registered professional. I strongly recommend that consumers do their research to ensure that they are informed and 100% comfortable with their appointed debt counsellor, as well as the debt review process.