The habits of a good debt counsellor

If you find yourself with too much debt, you might think about applying for debt counselling. But, before you start the debt counselling process, Justmoney speaks to Paul Slot, the president of the Debt Counsellors Association of South Africa (DCASA) about what defines a good debt counsellor, and what you should always look out for when it comes to debt counselling.

The DCASA explains that there is a lot more to debt counselling than just understanding the National Credit Act (NCA).

Debt counsellors are also expected “to render services of the highest objectivity, integrity and good faith and are expected to balance the interests of all parties involved, from Credit Providers to the Consumer, while being fair and honest at all times,” explains the DCASA.

“The success of a debt counsellor is measured by process compliance, service to consumer and credit providers, the payment rate of consumers under debt review and number of clearance certificates issued,” said the DCASA.

The DCASA highlights seven qualities of a good debt counsellor:

• They should be able to resolve queries,
• Be able to provide quality assessment and customer service,
• Take on consumers who can, and want to pay their debt,
• A good debt counsellor should also follow up on non-payments by consumers,
• They should monitor the consumer’s payment rate
• They should have a relationship with the credit providers,
• And, finally, they should have control over the debt review process.

What to know before you start debt counselling

Before you start the debt counselling process, a debt counsellor should explain the important components, rights and obligations regarding the debt review process to you before going ahead with an application.

Slot gives some tips on what else a consumer should know before they start the debt counselling process:

• You should know the full details of Debt Review process,
• Make sure you know who the Debt Counsellors is – do they belong to DCASA?
• Know where your money is going and how much is going where. Your debt counsellor should put together a new budge with you that you need to adhere to. Get to grips with this budget and ask any questions you may have.
• Know the details of repayment plan.
• The details of the application to court.
• Remember that Debt Review is a process to financial healing and not an instant solution, so go in knowing that this is going to take work and that, just like any other financial service, you will have to pay for it.
• If you stop paying you lose protection and the debt counsellor can suspend services.

What should a debt counsellor always do?

When it comes to what a debt counsellor should always do, Slot has five points to help you make sure your debt counsellor is still on the right track:

• A debt counsellor should always protect the client and communicate the progress of the debt counselling.
• They must send all required documentation to credit providers.
• A debt counsellor will restructure a budget and finalise the repayment plan with you, and the creditors.
• They will also finalise the Debt Review Court application.
• And then finally, they will implement the Court’s decision when obtained.

What should a consumer look out for, or be aware of when it comes to debt counsellors?

Just like the above point, there are some things a consumer should look out for when it comes to debt counselling.
Slot offers some tips below:  

• Always check that debt counsellor is registered with the National Credit Regulator (NCR).   
• Also make sure that they are a member of the DCASA.
• Is the debt counsellor in an established debt counselling office, with trained staff?
• Do they implement the NCR Task team Guidelines?
• Make sure that the debt counsellor explains the process to you, and if you do not understand, then ask again.
• Read the application form for debt counselling (Form 16), and make sure that all the information is correct.

If you are unsure of any of the processes, or information that a debt counsellor is explaining to you, just ask them to explain again. When it comes to your financial well-being, it is important that you understand the process fully.

For a guide to debt counselling, click here.

For 10 questions that you should ask your debt counsellor, click here.

For a list of abbreviations pertaining to debt counselling, click here.