14 Jul How Debt Counselling Fees Work
We encourage over-indebted consumers to first fully understand the Debt Counselling process, and all the related fees, before choosing to make use of this debt relief measure. At Debtco Group, we offer our clients a trusted and transparent Debt Counselling service, where all associated fees are charged as prescribed by South Africa’s National Credit Regulator (NCR) fee guideline.
When it comes to Debt Counselling, the main objective is to simplify your finances and make room in your budget to live more comfortably, which is achieved by reducing how much you spend paying off debt each month. There are fees that are due upfront and in full, namely the application fee (R50), as well as an additional R300 administration fee for each Debt Counselling application that you submit. The services for administration include a consultation with you, as well as a breakdown of the process and all fees, updates to the DHS (Debt Help System) and communication with your various creditors, where we notify them that you are undergoing Debt Counselling.
Determination fees and Restructuring Fees include proposal preparation, loading the new payment plan to the Payment Distribution Agencies (PDA’s) profile, restructuring your debts and negotiations with your creditors, as well assupplying relevant documentation to the attorney for drafting of the court application. This fee is either the distributable amount or a maximum fee of up to either R8000 or R9000, depending if you are one applicant or married in community or property, and depending which is lesser. This amount is due 1 month after the drafting and submission of proposals.
A Reckless Spending Fee of R1500 is also payable 2 months after the written outcome of your reckless lending assessment is completed. An important part of the Debt Counselling process involves our team ensuring that you were in no way a victim of reckless lending by any of your creditors, which could have added further strain to your finances and would not be your fault. Talking to one of our Debtco Group qualified Debt Counsellors for clarity on how Debt Counselling fees work is the best way to fully understand how much is paid, by when and why.
Other fees that form part of the Debt Counselling process include an After Care Fee, which amounts to 5% of the distributable amount or, if lesser, a R450 maximum fee – this amount needs to be paid monthly after the second month that the after care services have been presented. For the submission of the NCT (National Credit Tribunal) application, a NCT submission fee of R500 needs to be paid in the second month after the restructuring process had been completed. Attorney Fees, which were agreed to in writing when you applied for Debt Counselling, are to be paid to the attorney according to the agreed to terms.
Rather than attempt to manage numerous debt instalments every month that cannot be sustained according to your income and living expenses, you will only have to pay back one, much more affordable monthly payment through Debt Counselling. This monthly payment is managed by a reputable Payment Distribution Agency, who distributes the relevant amounts to your varied creditors. Our Debtco Group team have the knowledge and expertise to negotiate lower monthly payments with your creditors for you, which also includes lowering interest rates wherever possible. You are in good hands with us!