How to choose a reputable debt counsellor?

More and more consumers are in need of a debt counselling company to assist with solving their debt problems. This is however a commitment of up to 60 months, so it’s important that you select the right debt counsellor to help you complete this process successfully and in order to get to a debt free status.

Here is how you can make sure you choose right:

1. The debt counsellor must be able to thoroughly explain the debt counselling process

Professional debt counsellors are to be registered with the NCR and are expected to provide valuable and up to date information about the debt counselling process. Debt counselling is a formal and closely managed debt solution that was implemented by the National Credit Act (NCA) in 2007 to ensure that South African consumers are ethically assisted with eradicating their debt.

2. Debt counsellors must protect your personal and financial information

Debt counsellors are to keep to your personal and financial information confidential at all times. Make sure the debt counsellor you are considering to appoint, has security measures in place and that their client’s information is kept 100% confidential and not sold to outside parties.

3. Debt counselling fees

Debt counsellors are allowed to charge various fees associated with the debt counselling process, but they must be in line with the fee guidelines established by the NCR. According to the NCR, debt counsellors have the ability to charge a debt counselling application fee, debt restructuring/’debt counselling’ fee, as well as legal fees and a monthly after care/‘trailer fee’.

You are allowed to ask the debt counsellor about their fee structure before you sign up and they must be able to supply you with the correct information before any commitments are made from your side.

4. Debt counsellors must be registered with the National Credit Regulator

According to the National Credit Act (NCA), all debt counsellors are required to register with The National Credit Regulator. Debt counsellors will have a registration number, which can be verified by contacting the NCR on 0860627627.

5. Debt counsellors must use a reputable payment distribution agency

Debt counselling agencies are legally not allowed to pay credit providers on your behalf once your debt has been restructured, and are instead required to use a Payment Distribution Agency (PDA) that is registered with the National Credit Regulator.

6. Debt counsellors must be available to assist with queries or issues that may arise

Should any issues arise throughout the process, a debt counselling agency should be able assist you. Make sure your debt counsellor has h the resources and capacity to assist with queries and information requests at any time during your debt counselling journey.