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A News24 Business reader has to pay R500 to receive a debt clearance certificate but is currently unemployed. He writes:
I was under debt review and have paid up my debts. Now I am being charged R517 for a clearance certificate. Is there any other way to get the certification as I am currently unemployed?
Benay Sager, head of DebtBusters responds:
Receiving a clearance certificate is an important and perhaps the most joyful part of the debt review/counselling process. The debt counsellor (on behalf of a consumer) issues the clearance certificate once all the requirements have been satisfied. This includes all relevant accounts being paid up (in case of a bond the bond repayments need to be up to date) and there are no outstanding fees owed to the debt counsellor.
It is important to keep in mind that the consumer is ultimately responsible for paying back their debt whether they are in debt counselling/review or not. While in debt counselling, consumers make a monthly payment to the nominated Payment Distribution Agency (PDA) (nominated by the debt counsellor) which then distributes monies owed to the different creditors based on the agreed-upon amounts.
It is important to bear a few things in mind:
- While in debt counselling, it is the consumer who pays their debt to their creditors via the PDA. The debt counsellor does not collect or make payments – payments are controlled strictly by the PDA, which the debt counsellor nominates.
- In debt counselling, while the consumer can pay the creditors directly, if the consumer owes fees to the debt counsellor (for example, for an aftercare fee), then these fees would need to be settled before issuance of a clearance certificate.
- Before the debt counsellor can issue a clearance certificate, the debt counsellor needs to be in possession of "paid-up" letters for all credit agreements to ensure outstanding debt has been paid by the consumer (again, this excludes the bond agreements, which have to be up-to date for issuance of a clearance).
In this instance, we would urge the consumer to check the above points, and understand/query the nature of the fees owed to the debt counsellor so that they can successfully obtain their clearance certificate.
Questions may be edited for brevity and clarity.
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