If you’re looking to go through the debt counselling process to help with your debt, you’re going to want to know what the fees are, as well as other important information to help you along the way. So, let’s look at the debt counselling legal fees you can expect.
But first, what is debt counselling?
Debt Counselling Explained
The National Credit Act introduced debt counselling to tackle the problem of debt in South Africa and relieve some of the pressure that it puts on everyday citizens.
The process is intended to help over-indebted people who are struggling with debt by providing budgeting advice, negotiating with credit providers on your behalf for reduced monthly payments, as well as restructuring your debts.
Now, let’s look at the fees involved in the process.
Debt Counselling Legal Fees
The National Credit Regulator issues fee guidelines for debt counsellors that include an application and administration fee of R350 plus VAT, a restructuring fee equal to the first month’s instalment up to a maximum of R8,000 plus VAT (maximum of R9,000 for joint applications married in community of property), and a reckless lending fee of R1,500 plus VAT.
There is a monthly maintenance fee of 5% of the instalment up to a maximum of R450 plus VAT. These fees ensure you always receive professional service from your debt counsellor and are included in your monthly instalments.
There is also a legal fee payable to the attorneys for obtaining a court order to ensure you are protected from your credit providers for the duration of your debt review. Your debt counsellor provides details of this in your application.
How Do Debt Counselling Payments Work with National Debt Counsellors?
The debt counselling process is highly regulated by the National Credit Regulator. This means the fees mentioned above, how monthly payments are collected and distributed, and the time frames for the processes are all contained in the National Credit Act or supporting guidelines from the NCR.
As National Debt Counsellors, we don’t collect any money from your bank account directly. We only work through a licensed and accredited Payment Distribution Agency as per the terms of the NCA.
We’ve chosen to partner with the biggest and most reputable PDA in the industry, Hyphen PDA. Every month, Hyphen deducts only the agreed instalment from your account via a DebiCheck-authenticated debit order. They distribute the funds directly to your creditors according to the agreed plan that has gone through court.
We only charge the fees allowed under the NCA. You will see an upfront breakdown of all the fees charged by us and the PDA in your initial assessment. DebiCheck debit orders allow you to easily control your monthly debit orders.
Why Work with the National Debt Counsellors?
We’re a team of leading debt counsellors who believe that debt doesn’t mean disaster. We assist everyday South Africans who find themselves struggling to meet their monthly financial obligations. Our team of Debt Counsellors are registered with the National Credit Regulator and offers you a free, no-obligation assessment of your financial situation.
If you commit to this process properly, your life can change. If you’re struggling to manage your debt, take that first step towards financial freedom and contact us today. Don’t put it off, because your financial freedom is waiting!
