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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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    Hi Kevinb,
    Thanks for the reply!
    Yes they are paying the creditors as they send me a statement every so often to show the payments. Also I haven't heard anything from my creditors yet.

    Thanks though and I will keep checking!

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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.

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    Thanks Dave A,
    I agree and that's what worries me. The consequences would probably be severe but you cannot squeeze water from a rock.
    Okay, well not at the moment anyway. I know that my business will pickup soon. But how do I show the creditors this if I am on Debt Counseling?

    It seems as if the Debt Counselors are no longer interested in your problems once they have received their money which was all upfront. All I get from them is "Good Luck" and "Sequestration"

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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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    Hi Blurock,

    Thanks for your concern and valuable advice.
    I definitely agree it is due to the business. Probably my fault too as I am the business.
    I do "glass bonding" ie. UV Bonding is a process whereby, typically two pieces of glass are glued together using a UV curing adhesive, which is cured by either a UV light or UV activator. So I do showcases to all kinds of problems people have out there and also deal largely with shopfitting companies.
    I have a website and most of my business comes from them finding me on Google. I have also patented 3 swimming pool products one of which is called the "Stealth Filter Buddy". However, the big boys are keeping me out and the patent fees have definitely put a strain on my uvbonding business. At this stage "Stealth Pool Products" is being De-registered by Cipro as my accountant decided not to do the annual returns anymore as there was no money coming in to the business for awhile now.

    The big shame in all this is that It is definitely a great product and facilitates in the cleaning of the weir basket. All users so far have given good reviews and have sworn never to use the old type again.
    Builders Warehouse were keen to have it as there product but have never approached me again and I think it was politics mixed with Mass Mart.

    Life is just not fair and I am fed up.

    One of my friends works for OMSA (Operational Marketing) and is trying to get me to do some more Siemens electrical 'light current' installations for them. This definitely helped last year when I did a big installation for Savuka Gold Mine.
    If I could just do more of these I would be out of the poop in no time.

    My wife and I also started a website design and hosting company but is still in the infancy stages and requires more time to grow. It almost feels like I am fighting against time. It's as if you fall of a ship and are busy drowning. You know the ship is turning around because you can see it but it feels as if it won't be in time.

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    thanks for the offer...but i have no need to come to your office...however i am sure there are lots of people on this forum and others...who would like to know what it is exactly debt councilling companies do and how they derive an income...maybe people like myself...have just heard too many bad things....maybe it is not always the company which is the problem but rather the customer...as we all know there are bad elements in all industries/fields...here you have a good opitunity to clear up some misunderstndings or myths about debt councilling

    what do debt councilling companies do?
    how do they make a living?

    if i am in R100 000 worth of debt and am missing payments...why do i go to a debt councillor?

    how do you make a living...do you charge by the hour for your services or do you lend people money?

    help us to understand...what debt councilling is all about...and why it is not such a bad thing as people make it out to be...personally when i hear debt councilling...i see loan shark...please clear up this misconseption.

    this could be better started in a whole new thread...leave it up to dave to make the call.

    there are a variety of reasons why people get into debt...

    mismanagement of their finances...bad customers
    lose of employment...
    motor vehicle accident...(as in my case many years ago)
    winning/earning lots of money...buying lots of material...then cannot keep up and maintain the lifestyle...

    but lets rather look at "debt councilling" how did they come about and what is your primary function in a society which unfortunetly has got to a stage where most people are living on plastic and credit.

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    Quote Originally Posted by murdock View Post
    personally when i hear debt councilling...i see loan shark...please clear up this misconseption.
    Loan shark or just shark?

    I suppose I can see where the "shark" association comes from - all too easy to see the industry as one that takes advantage of others' troubles.

    I must say at the early stages of the debt counselling industry, I had serious reservations about whether they woud really be adding value. It is, after all, an extra cost on top of an already heavy debt burden. But the industry has become more professional.

    There is a much better understanding of what processes work and what doesn't. Handling of payments received and distribution is much improved, with better reporting systems making this more transparent. And then the big win was a breakthrough agreement on reduced interest rates and extended payment periods with the banks.

    So there is potential there for the debt counselling industry to be a real source of value for society. And in fairness the industry is starting to realise it.

    What troubles me is there remains no accountability for the school fees of this industry paid by some of their early clients. There are cases where the negligence, incompetence and in one case I'm aware of outright fraud of the debt counsellor has cost their client dearly, and ordinarily would attract a civil lawsuit to recover damages. Of course, the over-indebted client doesn't have the funds to institute such a lawsuit, and must suffer their losses as authorities and the industry try to sweep these cases under the carpet.

    ...but they don't suffer their losses in silence...

    And it's clients' views shared that ultimately is the reputation of an industry.

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    Dave - what many people don't understand is that the banks, attorneys, consumers and pda's have all made the debt counsellors their escape goat.

    Banks loose money paid over to them as they change account numbers without notifying the pda or DC.
    Attorneys steal clients money by not completing mandates which they have been paid for in full.
    Consumers do not stick to their payments, do not notify the DC and either make no payments or short payments which is immediate termination if no notification has been sent out. The Festive Season is the worst month for this as come Jan, a Summons is waiting for them and from a legal perspective, the DC's hands are tied.
    PDA's do not always pay the money over as they should, there are only 2 that should be used.
    Some Magistrates have no clue about the NCA or the rulings and very little money has been spent on educating the judicial system.
    ...But for all of these mentioned, it is only the DC that gets blamed.

    With very little infrastructure in place, little to no support from from Associations, loop holes in the NCA that banks have found, debt counsellors literally getting thrown into the sea with no clue on how to swim, with no life jacket or raft in a sea invested by real sharks....the debt counselling industry is the most successful industry in SA as no other has had an ongoing 5 year war. Yet despite all the above issues, have still saved tens of thousands of homes, cars and lives. The debt counsellors who have been around for a while are real pioneers and despite all the odds, have proven to be a real David and Goliath story.
    There is a big shake up currently happening inside the industry - this will be for the betterment for consumers and may finally prove to many a SA, the real value that a debt counsellor carries for the economy of SA.

    Unfortunately the consumers that have been wounded or killed, never knew that there was recourse for them to use. They could have used the NCT / Tribunal, NCR or Ombuds to help them at no charge. Like every war - there are always the one's who got caught up in the cross fire.

    Hope you all have some better understanding and clarity on many of the mentioned issues.

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