Debt repayment shock

A Fin24 user is alarmed by the fact that his repayments under debt review have been increased by over 50% even though he cannot afford it. He writes:

I have been under debt review for six months and my counsellor has not finalised repayments, but they have been deducting R8 309 every month.

Last month she increased my repayment from R8 309 to R12 609 and it was unpaid because of insufficient funds. I have been telling her that I can't afford that but she says creditors insist I should pay that amount.

My net is R20 992 and my living expenses are R9 000. If you add them, they are above my net.

Please help me, I am so stressed.

Friedl Kreuser of Summit Financial Partners responds:

It is hard to advise you from the facts given. You should ask your debt counsellor for a payment schedule reflecting payments made to credit providers in the past six months.

If the debt counsellor or the PDA is deducting money from you without making payments to credit providers, you should report the debt counsellor to the National Credit Regulator immediately (0860 627 627).

It is possible, however, that interim payments are being made to credit providers while the debt counsellor is busy finalising the payment plan.

After six months, however, the payment plan should already have been submitted to court, never mind finalised, so it sounds like the debt counsellor may be failing to stick to the required time lines.

It also sounds like your debt counsellor may not be assessing your needs or negotiating with your credit providers effectively if she is expecting you to pay more than you can reasonably afford.

If you feel that your debt counsellor is not performing as required, you should report this to the NCR and ask them to investigate. They should be able to clarify the progress on your file or, alternatively, transfer you to a new debt counsellor.

- Fin24

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