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Credit providers may be the biggest obstacle in the debt review process, according to a report released by the University of Pretoria and the National Credit Regulator (NCR) earlier this month. The report, titled The Debt Counseling Process, assesses the challenges to debt-ridden consumers and the credit industry.

Stating the obvious
The report confirms some suspicions about the extent to with South Africans are in debt. With approximately 10 000 new applications each month, 112 000 consumers are already under debt review. According to the report, there are a number of factors obstructing the debt review process

Credit providers not coming to the party
The biggest culprit was found to be credit providers, particularly banks. The report finds that credit providers often stall the process by failing to supply the debt counsellor, who has only 60 days to complete the process, with the required information timeously.

However, debt counsellors are not let off the hook. Some debt counsellors are said to be devising ridiculous plans – in one case, implementing a plan that would see the debt paid off in no less than another 100 years!

Recommendations
The report recommended the establishment of an ombudsman to deal with matters related to debt management. This ombudsman would streamline the process and improve communication between the different parties by offering dispute resolution. Other recommendations included education for the different parties and tightened legislation.