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Frequently Asked Questions (FAQ)

Understanding Debt Counselling

1. What is Debt Counselling?

Debt counselling is one of the debt relief measures available to South Africans and is provided for in the National Credit Act. This process is intended to assist over-indebted consumers who are struggling with debt. Assistance is provided through budget advice, negotiation with credit providers for reduced payments, and the restructuring of debts. It is not a savings mechanism, and consumers should not be fooled by claims that they will save up to 60% of their monthly income. https://www.ncr.org.za/documents/Brochures/NCR_english.pdf

2. Is Debt Counselling and Debt Review the same thing?

Yes, the terms Debt Counselling and Debt Review are used interchangeably.

3. Who is eligible to go under debt counselling?

Any consumer experiencing or likely to experience debt-related problems and having difficulty making his/her current monthly payments is eligible. An over-indebted consumer may approach a debt counsellor directly or be referred by a creditor, the magistrate court, or the National Credit Regulator. The consumer must choose their own Debt Counsellor and should have a distributable income to offer reduced payments to credit providers.

4. Must Debt Counsellors be registered? Where can I check if my Debt Counsellor or potential Debt Counsellor is registered?

Yes, all debt counsellors must be registered with the National Credit Regulator (NCR). You can check on the NCR's website under the "Debt Counselling" section to search for a registered debt counsellor.

5. Can I apply for debt counselling whilst under Administration?

No, you cannot. The administration order must first be rescinded by the magistrate's court where it was granted before you can apply for debt counselling.

6. Can I apply for debt counselling without consent from my spouse?

If consumers are married in community of property (COP), they cannot apply for debt counselling without consent from their spouse, and a joint debt counselling application is necessary. Only those married out of community of property can apply without spousal consent.

Payments and Fees

7. How much does debt counselling cost?

There are set fees as per the fee guideline from the National Credit Regulator (NCR) that consumers should be charged. Debt counsellors are not allowed to charge above these set fees. These fees will be shared with the consumer upon agreeing to the Debt Counselling process and signing of form 17.1

8. How do I make payments when I am under debt counselling?

A consumer under debt counselling can make payments through a registered Payment Distribution Agent (PDA) or directly to their credit providers. A consumer may not make any payments, except for the R50.00 debt counselling application fee, directly to the Debt Counsellor, as Debt Counsellors are prohibited from collecting and distributing debt counselling funds.

9. What is the role of a Payment Distribution Agent (PDA)?

The PDA's role is to:

  • Receive and store a Debt Review repayment plan from a registered Debt Counsellor.
  • Execute the collection of the debt repayment instalment from the consumer on the agreed date.
  • Pay credit providers as instructed in the plan.
  • Report on the collections and payments to the consumer.
  • Provide necessary support to consumers, debt counsellors, and credit providers.

Program Management and Exit

10. Once under debt counselling, can a consumer change a debt counsellor if they are unhappy with the current one?

Yes, the consumer can change the debt counsellor by looking for a new one. The new debt counsellor will take over the file and continue the process. The consumer is not required to pay the new debt counsellor fees that were already paid to the previous one, except for any after-care fees due to the new debt counsellor.

11. If under debt counselling, and a consumer experiences a change in circumstances (e.g., salary reduction, retrenchment), can they get assistance?

Yes, the debt counsellor must follow the guidelines issued by the National Credit Regulator regarding a change in circumstances. In this process, the debt counsellor negotiates new or interim terms with the credit providers to allow for the change.

12. Once under debt counselling, can one simply exit the programme before settling one's debts?

No. You can only exit debt counselling by paying off all your debt obligations and obtaining a clearance certificate. A clearance certificate is issued once all your short-term debts are settled, and if you have a home loan account, it must be up to date in terms of the debt counselling re-arrangement order.

13. If a consumer feels like they have been put under debt counselling without their consent, who should they contact?

Consumers should contact the National Credit Regulator (NCR) to lodge a formal complaint. The NCR will then investigate the matter.

Debt Counselling Explained:

https://www.ncr.org.za/images/Public%20Notices/Debt%20Counselling%20Explained%20Advert.pdf

For further assistance or to lodge a complaint, you may contact the NCR: