Some consumers who are considering debt review are concerned about how to ensure that the payments they make are correctly paid to the creditors. The good news is that in terms of the National Credit Amendment Act, a consumer has the right to make direct payments to credit providers and not make use of the services of a payment distribution agent (PDA). According to the National Credit Regulator(NCR), election by consumers to make direct payments to credit providers cannot be construed as noncooperation and should not be used as a reason for suspension of debt counselling services. When you apply for debt review, you would need to sign a document called Form 16, in which you would also need to indicate whether you wish to pay your credit providers directly or via a PDA.

After withdrawal

  1. You remain responsible for making all payments in full and on time.

  2. You will have to provide monthly proof of payments to the debt counsellor for the counsellor’s records, and to enable the provision of aftercare service.

  3. If you miss a payment or pay late, you will still risk the termination of the debt review by the credit providers.

  4. Debt counselling fees are payable to a debt counsellor for services rendered and this includes payment of aftercare fees.

  5. Where the debt counsellor has suspended provision of a service, a consumer must provide proof of settlement letters from credit providers for a debt counsellor to issue a clearance certificate.

What do consumers need to know

What you need to do to be on the safe side?

  1. Do not ignore legal letters- act immediately upon receiving the letters.
  2. Pay your account on time at all times.
  3. Inform your creditors of your change in financial circumstances.
  4. Make payment arrangements-when you can’t meet original obligation.
  5. Always make sure you understand your credit agreement.