How to handle an incompetent debt counsellor

A Fin24 user wants to know how to deal with an incompetent debt counsellor, who caused her to lose her vehicle.

What I would like to find out how to deal with an incompetent debt counsellor.

This counsellor did nothing about one of my creditors, not responding to them or anything.

As a result we lost our vehicle after one of their attorneys agreed to exclude it from the process and without informing us.

How do we handle that? How can we replace what we lost due to their incompetence?

Renee Marais NCRDC1780, an independent debt counsellor based in Pretoria, responds:

Please fill out a complaint form 29 on the NCR website ( and complain about the debt counsellor.

You may also phone the National Credit Regulator (NCR) on 0860 627 627 and someone will assist you.
Secondly, you might have to take the legal route. Debt counsellors must be held responsible if they do not look after the consumers on whose behalf they engage in debt review, and in the renegotiation of debt repayment.

You can appoint an attorney to investigate the details of your situation.

It would be a good idea to make use of a competent debt counsellor to advise the lawyer of your choice as to what needs to be done and how to proceed from there.

In short, here is a synopsis of what the debt counsellor should have done:

- Five days after the consumer’s debt review application has been assessed and accepted, a 17.1 notice must be sent to all creditors;

- Five days after the 17.1 notice has been sent, a 17.2 notice of acceptance must be sent to all creditors;

- Within 60 working days a proposed repayment plan must be sent to all creditors;
- Within 60 working days a notice of motion must be served on all creditors by the lawyer representing the consumer and appointed by the debt counsellor;

- The application must be served on all creditors as soon as possible;

- A court order will be granted in the magistrate's court if all the information is complete and the debt counsellor has finalised the repayment plan with all parties involved; and

- Check that the payment agent used is distributing according to the court order and provide proof of payment to consumers every month.

What a consumer must do to ensure that creditors do not take legal action:

- Never skip payments;

- Make payments every month and 100% according to the proposed repayment plan provided;

- Check every month that the proof of debt review payment is provided to you by the debt counsellor;
- Ensure that you sign the documentation requested by the debt counsellor and the legal team so that the court process is not delayed;

- After the court order has been granted and you have received a copy from the debt counsellor within 24 hours, ensure that you pay timeously and 100% according to the court order granted; and

- Ensure that the payment agent distributes 100% in accordance with the court order granted.


Note that court orders do not show the debt counsellor's fee or the third party payment agent's fee.

Those have to be added to the monthly repayment amount you are responsible for.

Check that the fees deducted from the payment agent are 100% correct. If there is a difference, investigate.

In terms of section 88(3) of the act, creditors may terminate due to as little as 5c of insufficient distributions and take legal action.

What to do if a creditor threatens to take legal action?

Take the warning letter (usually sent via registered mail) to the debt counsellor.

Demand a response within five working days by either providing you with a letter informing you of the status of the termination and/or what steps were taken.

If a creditor terminates due to non- or partial payment, the debt counsellor cannot help you. You will have to catch up on the arrears.

A debt counsellor is usually not a lawyer and when legal action is taken they are not in a position to assist.

You will need a lawyer for magistrate's court cases and in the high court - usually regarding a car or house - you will have to make use of an advocate too.
In your case it is not clear what the problem is. If legal action was taken before you applied for debt review, the matter has to be excluded from debt review as stipulated by the National Credit Act.

A debt counsellor might attempt to assist in getting the credit agreement back under debt review, but this is additional work and falls outside debt review.

A debt counsellor may make use of section 86(11) and/or 87 when attempting this.

Know that it may cost you extra:

This must be discussed with you at the interview.

An attorney is not allowed to make decisions in court on behalf of consumers and/or debt counsellors.

They have to postpone the matter and refer it back to the debt counsellor to discuss the issue with the consumer.

A consumer is always in charge of his finances and any changes must be discussed with the consumer.

Even if there is no longer room for negotiation, it still needs to be discussed.

If the attorney changed the debt repayment in court one-sidedly by excluding the vehicle, the attorney must be held responsible.

An attorney only takes orders and is not allowed to make any changes on behalf of consumers.

You will have to report the attorney to the Law Society of your province.

Sometimes the magistrate will listen to the debt counsellor's proposal and the creditors' counter-offers and make a ruling.

In such a case the matter will not be open for discussion.

- Fin24

Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.


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