According to the South African Banking Risk Information Centre (SABRIC), some
debt counselors and
debt management clients are abusing their privileged position by not being forthcoming with their clients. More than just determining whether clients qualify for debt review, debt counselors must determine whether debt review or
debt counseling is in fact the best means to sort out over-indebtedness.
Debt review is not the only way for those who are struggling to meet their financial obligations to sort out their monetary problems. Other options like consolidation loans, and negotiating with your creditor can be as effective as debt counseling.
MD of Debtbusters Luke Hirst recommends that counselors must offer information up front so that customers can be fully informed as to how to get out of the debt trap. Often this means customers applying for debt review must ask the right questions and also apply through a reputable debt management company.
The first thing to determine then is if the debt counselor is an official and approved service provider. Each debt counselor is given a registration
number. Ask for it. Also determine how long the counselor has been operating as an indication as to reliable they are.
Make sure you understand all the fees of the counselor up front for each scenario. Debt counseling costs more than the application fee. Even if your application is rejected for debt review, you will have to pay. Find out how much this will cost.
Even better than this, ask the debt counselor how to determine if you qualify for debt counseling. They should show you how to determine whether or not you’re over indebted.
Ask if your money goes through a payment distribution agency that is accredited and regulated by the NCR.
Ask the counselor what skills and infrastructure they have to ensure that you are looked after while in the debt counseling process.