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Thread: I do not understand Debt Counselling fully????

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    Question I do not understand Debt Counselling fully????

    Hi,
    My wife and I have been on debt counselling since August 2011.
    We have managed to pay our instalments of R10’171.18 every month.
    We started falling behind from the end of Feb this year and paid about a week later (10 March)
    Then again a late payment for the next month was also a week later.
    Now May and June has not been paid at all yet as we simply do not have the full amount of R10’171.18 + R10’171.18
    I emailed the debt counsellors to ask if we can pay whatever we can (as we get money through the month) to start catching up and if they can then pay these small amounts towards our cars and house to show the creditors that we are at least paying something for now. The answer I got was…
    “Good day Gary,
    Unfortunately the process does not work that way.
    Payments need to be the full amount so when distribution takes place it’s a once off payment.
    You will have to get the payments up to date as soon as possible to avoid your creditors terminating because if they want to terminate and we don’t have proof of the correct payments we cannot protect you.
    Your other option is to sequestrate if you are struggling with the monthly payments towards the debt counselling.”
    OK. So here is my question.
    What is the point of Debt counselling if we HAVE to make the FULL payment each and every month. I mean, the whole point of being on debt counselling is that we are struggling with our debt. I think it is also because we work for ourselves and do not always have enough money at the end of the month as we don’t earn a fixed salary? So would it not be better for me to come off debt counselling so that I may pay something towards my cars and house bond?
    Also I keep getting asked to take their sequestration product? This is worse because an investor would buy my house at an auction price (80%) less than market price from the bank and then I would have to RENT my house from the investor at almost the same monthly price as I was paying? And this would be disastrous in the fact that if I miss a payment then, the investor could kick me out and I’ll be on the street in no time.
    I am really in a catch 22 situation and really need some serious advice. Also with the sequestration package I would be able to start paying for the cars with the finance companies as before? But I thought a Sequestration means that you cannot do this as everything in your personal portfolio would be scrapped and you would lose these financed items?
    Please Help. I would rather just come off Debt counselling and make arrangements with my house Bond and 2 cars myself and pay what I can for awhile so they can see I am trying and then as soon as things pick up again, pay the full instalments?

    I have a copy of the Sequestration Product if you need me to post it...

    Any advice will do please.
    Many Thanks.

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    I'm sure some people will give you advice here, but I would like to say one thing :- Make sure that the money that goes to the debt councillor is goint to the people you owe to - make sure of this every month, because I have a friend that has been paying a debto councillor for over a year and has just found out that the debt councillor is paying a minimal amount over - perhaps his fault as well, thefore just be aware !

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    Quote Originally Posted by Gfacius View Post
    Now May and June has not been paid at all yet as we simply do not have the full amount of R10’171.18 + R10’171.18
    Pay R10 171.18 now, and the next as soon as you can.

    You really, really really need to try to stay with the schedule. As you are clearly aware, the consequences of the debt re-arrangement being cancelled are severe.

    You work for yourself - make it happen.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member Blurock's Avatar
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    Hi Gary,

    What business are you in? It seems as if the problem may start with the business not generating enough cash.

    My question; is the business sustainable? Is there a way to increase profits and revenue?
    Do a health check on the business and see if it is possible to collect outstanding debts and to reduce stock to generate cash into the business.
    Excellence is not a skill; its an attitude...

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    the way i see debt councilling...as a legal for of loan sharking...at the end of ther day all you do is add more interest onto whatever outstanding debts you already have.

    my wife was advised to go for debt councilling...instead she sat down took all her problems...put them onto a spreadsheet and boy where there lots (credit cards...petrol cards...vehicle hp...personal loans)...worked out what she could afford...sent all the people she owed money to an email...with a payment plan...that was end of last year...she has since paid off her car and by the end of this year would have paid off every single credit card...personal load...petrol card...clothing account you name it...without the addtitional interest and cost of a loan shark (debt councillor)...we are talking over R100 000 worth of debt.

    she still gets calls every month because she is not paying the full amount outstanding...but "pays the same amount every month"...some of the Aholes try bully her...but as i advised her...so long as she pays every month the same amount there is really nothing they can do...been down the loosing everything road once before and boy did i learn a trick or two.

    as soon as you sign something and commit to it with these loan shark...you screwed...just remember like anything in life there is no such thing as a free ride...and people cant pay salaries unless they are making money...so unless a debt councillor is receiving grants from the goverment...they must be making money out of somebody...if you think i am making it up go look at your debt councillors house...vehicle he/she drives and which private school their kids go to.

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    I agree with Murdock. Debt consolidation, debt counselling, it all works out expensive due to fees and additional interest. There are instances where debt counselling may prevent the creditors from pouncing and attaching your assets, but as a rule you can sort it out yourself. The only thing is you MUST have discipline and stick to your arrangement.

    Do not incur new debt. Pay off the high interest items first. Play open cards with your creditors. See the warning signs early and ask for help. Do not wait until things get out of hand and then expect a bailout.

    I have yet to see a bank or creditor turn someone away when they play open cards and show an intention to pay, although late.
    Excellence is not a skill; its an attitude...

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    they do try bully you...call you all hours of the day and night...but in reality there is nothing they can do if you just pay what you agree to...every single month.

    the best advice i could ever give anyone...reduce your credit limits...to an amount you can manage...i am not saying dont have credit cards or clothing accounts...just make sure they are within your limits...and when their credit department calls you or sends you a message to tell you your limit has been increased...get back to them and tell them to keep it.

    my credit card started off at R1000 and when i looked again...a couple of years later it was sitting at over R50000 in the red...plus all the other limits which where slowly increased over a period of time...when i looked again i was in over R200 000 worth of debt in cards and loans ...not including my bond or vehicle hp...and sinking fast...i got stuck in worked 20 hours a day...7 days a week for 2 months and made a little more than i owed everyone...as soon as i got paid...i paid out the entire amount and at the same time reduced all my limits to manageable amount....i have noticed they have been slipping again...but will address the issue shortly...in fact this time i will be reducing limits to around R1000 max.

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    I am surprised that you can even say the above and have not been reading the news of late especially yesterdays Cape Times Headline, "banks are greedy financial monsters"...
    If anyone thinks that debt counselling does not work, it is because many credit providers do not want it to work and in fact, most press reports have only given a very one sided story. Yes there have been some bad debt counsellors who have stolen consumers money. But please show me any other profession where this has also not occurred. It happens in every profession and if consumers knew their rights, enforced their rights, and ensured they also took accountability for their debt by asking their debt counsellors for proof, most of the problems with the "bad apples" within the debt counselling industry would be no longer.

    Gfacius please do yourself a favour and take note of these facts. Please also do visit www.thedci.co.za and you are more than welcome to email me directly off the site so that I can help you.
    1) Is is law that consumers must make payments monthly as per the agreed amount as your entire proposal to the bank is based on these figures
    2) Yes, you can pay in at different times of the month and yes you may also get your debt counsellor to send out a 17.3 informing your credit providers that late payment will be made, or that there has been a change of circumstance. You must however also inform them of how you will catch up on your payments.
    3) Point 2 CANNOT happen every month
    4) Debt Counselling is the last resort before sequestration. If you cannot pay monthly you must sequestrate. If you do not sequestrate and the banks sell your house, you are liable for the shortfall. If you sequestrate, all your debt is cleared.
    5) NEVER pay monthly into any debt counsellors account for your monthly payments. It must be with a Payment Distribution Agency, that is registered with the NCR.
    6) Download the Consumer Safety Checklist For Dealing With Debt Counsellors from www.thedci.co.za under consumers / documents and contacts / documents no 12.
    7) There is no other profession in South Africa, that has saved the tens of thousands of homes, cars and lives as that of the Debt Counselling Industry. I will challenge any person with facts on this one, because this is the truth, but unfortunately, it is SA's best kept secret...why because your creditors do not like you being in debt review. You only need to look at this link, read the comments to see the truth http://www.gopetition.com/petitions/...bad-faith.html
    8) theDCI is the only site in SA that gives you information without the sugar coatings of many other sites - why, because we fight for consumers rights, education while trying to help empower DC's further by exposing the truth of this industry in the press.
    9) Also go see www.facebook.com/theDCI read all the press articles to see what I am talking about in the above comments. Alternatively, you may contact me on info@thedci.co.za
    10) If you come out of debt review please understand that your creditors will charge you ALL the arrears interest and charges pertaining to your debt. They will demand that you pay all at once. If you don't, they will issue you a summons, and if they promise you they will not, you can pay them off, I can give you hundreds of people who can tell you the truth of what the banks did to them, once they came out of debt review after trusting what they were told.

    Know all the facts before you stop making your monthly payments. Do not listen to people who are not specialised as debt counsellors and who are not in the industry for a few years, as it is not their assets in question, therefore easy to give very poor advice.
    It is not just a bond and asset finance that we are talking about, it is about YOUR FAMILY HOME AND CAR which enables you to produce an income as well as transport your family from point A to point B safely.
    Take a look at the information and links I have provided you with - these are the real facts.

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    Quote Originally Posted by murdock View Post
    the way i see debt councilling...as a legal for of loan sharking...at the end of ther day all you do is add more interest onto whatever outstanding debts you already have.

    my wife was advised to go for debt councilling...instead she sat down took all her problems...put them onto a spreadsheet and boy where there lots (credit cards...petrol cards...vehicle hp...personal loans)...worked out what she could afford...sent all the people she owed money to an email...with a payment plan...that was end of last year...she has since paid off her car and by the end of this year would have paid off every single credit card...personal load...petrol card...clothing account you name it...without the addtitional interest and cost of a loan shark (debt councillor)...we are talking over R100 000 worth of debt.

    she still gets calls every month because she is not paying the full amount outstanding...but "pays the same amount every month"...some of the Aholes try bully her...but as i advised her...so long as she pays every month the same amount there is really nothing they can do...been down the loosing everything road once before and boy did i learn a trick or two.

    as soon as you sign something and commit to it with these loan shark...you screwed...just remember like anything in life there is no such thing as a free ride...and people cant pay salaries unless they are making money...so unless a debt councillor is receiving grants from the goverment...they must be making money out of somebody...if you think i am making it up go look at your debt councillors house...vehicle he/she drives and which private school their kids go to.
    Murdock - you should know your facts before making such comments on a live forum which are clearly false and defamatory. I invite you to come and sit in my office or any other debt counsellors office for one week to see the truth of what really occurs.

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by theDCI View Post
    if consumers knew their rights, enforced their rights, and ensured they also took accountability for their debt by asking their debt counsellors for proof, most of the problems with the "bad apples" within the debt counselling industry would be no longer.
    Damn - if only that were true.

    This case of debt counselling gone wrong has been vigorously followed up, and all I've seen is a lot of shuffling feet and no accountability from the debt counselling industry and its regulators.
    The trouble with opportunity is it normally comes dressed up as work.

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