Debtfree Magazine Issue #2 of 2021 by Debtfree Magazine

DO YOU HAVE REALISTIC EXPECTATIONS? Issue 2 of 2021

EXCELLENCE IS DOING ORDINARY THINGS EXTRAORDINARILY WELL – John W. Gardner

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FROM THE EDITOR Is it possible to be grateful that we made it out of 2020 alive and yet still moan about 2021? Is it too soon? Are we being ungrateful? At least we are not Elon Musk who lost $4.6 Billion the other day when Tesla shares devalued a little, ouch! Imaging having that much to lose in the first place, still, its got to be tough to go from the richest man in the world to the second richest man. I suppose he will be laughing down at us from his castle on Mars, with his robot butler, in years to come and will have forgot all about it by then. As for the rest of us regular Joes, the last few weeks have been tough. It has been hard to get motivated and stay motivated about 2021, vaccines or no vaccines. World powers America, Russia and China continue their political games on the global stage while back home they are all a hot mess. It’s hard to get other nations to listen to you when your own people won’t. Even the lure of “vaccines for cooperation” has somewhat lost its shine.

On the home front, vaccines have started to roll out to Presidents and doctors alike (not ex-Presidents though). This promises an extra layer of protection to the front line workers who have been putting their lives on the line for us. This is actually something to get excited about, these hard working people deserve all the help they can get. We can choose to focus on good news like this. There is, however, a ‘disconnect’ between the expectation of how 2021 would solve everyone’s problems, with the reality that 2021 is not going to be a cake walk. This is the common battle between expectation and reality. This challenge is what we dive into in this issue in some detail, regarding debt counselling - the unrealistic expectations some people have about debt review versus the realities of being in the process. Having realistic expectations can really help people who are in the process make good decisions, and to face the challenges that come their way. We hope you enjoy the news, reviews, tips and interviews in this issue that aim to both entertain and inform you. So, yes, I think we can take just a moment or two to feel a little sorry for ourselves that times are no easier in 2021. We can’t all run away to another planet to escape our problems. However, even now, we can choose to focus on the more positive things going on around us, and work to find joy in our day to day activities. This can be our reality, and for those who stick to the debt review process, their hopeful expectation of ultimately getting out of debt will soon be met by the reality of being totally debt free. being debt free.

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MAKING INDUSTRY TERMS EASY TO UNDERSTAND

DEBT REVIEW TERMS EXPLAINED

SET DOWN AT COURT Debt review is a legal process done through the courts. A Debt Counsellor will first negotiate with credit providers and then report on those negotiations to the local Magistrates Court, where the consumer lives or works, in official court papers. Debt Counsellors or the client’s attorneys will drop off papers at the Magistrates Court* and get a date when the case will be discussed or heard at court. Credit providers might also submit their own papers about the debt restructuring as well. This is known as having the matter set down at Court. *or other applicable court or tribunal

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REALISTIC EXPECTATIONS

NEWS

MEDIATION TRAINING REVIEW

COMPETITION WINNER

SERVICE DIRECTORY

DISCLAIMER Debtfree Magazine considers its sources reliable and verifies as much information as possible. However, reporting inaccuracies can occur, consequently readers using this information do so at their own risk. Debtfree Magazine makes content available with the understanding that the publisher is not rendering legal services or financial advice. Although persons and companies mentioned herein are believed to be reputable, neither Debtfree Magazine nor any of its employees, sales executives or contributors accept

any responsibility whatsoever for their activities. Debtfree Magazine contains material supplied to us by advertisers which does not necessarily reflect the views and opinions of the Debtfree Magazine team. No person, organization or party can copy or re-produce the content on this site and/or magazine or any part of this publication without a written consent from the editors’ panel and the author of the content, as applicable. Debtfree Magazine, authors and contributors reserve their rights with regards to copyright of their work.

C O N T E N T S

BREAKING NEWS

NCR STATISTICAL RETURN FOR DEBT COUNSELLORS The NCR has reminded Debt Counsellors that they were due to hand in their Form 42 Statistical Return for the last quarter of 2020 by mid month February 2021 (15th). If you forgot to do so then make sure you send it through to the NCR at dcreturns@ncr.org.za It is part of your conditions of registration as a Debt Counsellor with the NCR.

2021 BUDGET SPEECH Each year the Minister of Finance (presently Mr Tito Mboweni) delivers a speech outlining the current financial situation for the country and the plans for the coming months (and years) with regard to spending. This year Covid-19 has hit the economy hard (as regards income) and also necessitated a lot of extra spending (on grants to support those without work and vaccines etc). Basically income is down and spending is up. The Budget speech also lays out what resources (how much money) will be allocated to different portions of the country such as health care, schooling, social services etc.

SARB BLOCKCHAIN PROJECT Bitcoin has recently shot up to record highs amidst global investor uncertainty. The virtual token or currency market is growing in both use and acceptance worldwide. One challenge for governments is that the systems are designed to be decentralized and outside of easy control and regulation. Locally the SARB and other institutions are working on a project to see if the blockchain system can be sued to create a South African token system. Imagine a digital blockchain version of the Rand if you will. The project has been running for several years as regulators and legislators try to come to grips with the ramifications and regulatory challenges such a system would encompass. Recently, the project, which began back in 2018, has moved into a second phase as 4 of the Major local the banks work on a small “test” in a closed environment to see what all is involved and figure out: what next?

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DEBT REVIEW EXPECTATIONS VS REALITY

ARE YOU BEING REALISTIC ABOUT YOUR DEBT REVIEW? In business they say it is important to “under promise / over deliver”. In other words, don’t promise too much and leave your clients disappointed, rather work hard and give the client more than they expected. This will pleasantly surprise them and make them happy with your service. One of the common challenges facing consumers in debt review is that they do not fully understand what the process will involve. They are under-educated about the process, resulting in unrealistic expectations. Then when those expectations are not met, they become disappointed and disillusioned. Has this happened to you?

DEBT REVIEW EXPECTATIONS VS REALITY

WHEN DEBT COUNSELLORS PROMISE TOO MUCH Many debt counselling practices have a small team or even an outside company whose job it is to talk to people about debt review. They will tell the consumer how wonderful debt review is, and how it can really help them. This is true but…there are concerns in the industry that some of these teams might be over promising. They may be painting an unrealistic picture of how debt review is easy, debt review is just a way to save money, debt review is not serious, and how people can enter and exit debt review at a moment’s notice. The result is that some people who enter debt review have the wrong idea, that the process is a simple one, where credit providers always cooperate, where courts always side with the consumer, and where problems never come up. Wouldn’t that be nice!

DEBT REVIEW EXPECTATIONS VS REALITY

THE DANGER OF UNREALISTIC EXPECTATIONS If you purchase a product that is advertised to work “first time, every time”, you will justly get upset if the product is actually complicated and doesn’t work in every situation. Maybe you bought one of those exercise machines they advertise online or on TV. In only 2 weeks your winter fat will disappear. It should work in only 15 minutes a day, but as you look down at the remnants of cake on your plate, you are disappointed that it is much harder than promised. You may soon find that exercise machine gathering dust in your garage, or that amazing vegetable cutting gadget at the bottom of your drawer. When consumers have unrealistic expectations of debt review, the same thing happens. They start the process with enthusiasm, but when they hit speed bumps along the way, they might foolishly think they can just walk away, like they do with some many other things in life. This can have disastrous consequences, and could even make things worse than they were before.

EXPECTATIONS VS REALITY

CREDIT PROVIDERS WILL LEAVE ME ALONE ONCE I START DEBT REVIEW Some consumers seem to think that by entering debt review, it will change the behavior of credit providers and collections agents. While for the most part the banks and big credit providers try to make everyone in their business aware that consumers have entered debt review, they are often very big companies where one department doesn’t always know what another is doing. Sadly, some credit providers will still take a chance and try to negotiate with the consumer without the help of their attorney or Debt Counsellor. This bad behavior should be reported to your Debt Counsellor.

EXPECTATIONS VS REALITY

SAVE 60% ON YOUR MONTHLY DEBT REPAYMENTS Some debt counselling practices use the average statistics of their clients in their advertising to try help consumers think about debt review. This can create an unrealistic expectation on the part of a brand new client, thinking that they too will only pay 40% of what they were paying before the debt review. The reality is that each person’s case is unique. True industry averages help guess what might happen but each matter has to go before a Magistrate, who is the one who actually decides what will happen. Also if consumers do not give the Debt Counsellor all the facts when enquiring about debt review, they should not be surprised if they end up paying something slightly different to what they were initially told, based on incorrect information.

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EXPECTATIONS VS REALITY

THE DEBT COUNSELLOR WORKS FOR ME Some consumers think that the debt review is only for their benefit. They think the Debt Counsellor is like their own knight in shining armour who will always be able to work things out to their benefit. While it is true that Debt Counsellors get a fee for the work they do, these funds from the consumer would normally be going to the credit provider. So, in a way both parties are paying for the Debt Counsellors service. Debt Counsellors will use their knowledge of the law to protect consumers from abuse by credit providers, but they have a duty to find the best arrangement for all parties - a realistic and sustainable way for the consumer to pay, and the credit providers to get what is owed to them. It is also important for consumers to realize that Debt Counsellors have more than one client. You may have to be patient, from time to time.

EXPECTATIONS VS REALITY

IF I CAN’T PAY, THE DEBT COUNSELLOR WILL TAKE CARE OF IT Some consumers think that because the Debt Counsellor has worked so hard to help restructure what they have to pay towards their debts each month, that if they run into a problem paying one month, the Debt Counsellor can just fix that situation with the credit providers. Debt review is built around the principle of consumers repaying their debts. The best way to do that is in regular manageable amounts, month after month. This is the industry standard. If a consumer runs into trouble paying their debts, and if they get in touch with the Debt Counsellor well in advance, it is possible that the Debt Counsellor can talk to the credit providers or even take the matter to court but…if you do not pay, then the reality is, that some credit providers may walk away from the debt review. This means they could legitimately start new legal action against the consumer to try to collect their debt outside of debt review.

EXPECTATIONS VS REALITY

I CAN LEAVE ANY TIME I WANT Some consumers think that they can decide to leave the debt review at any time. They feel it is like many other services they use in life. If they get bad service or things are not working out like they thought they can just walk away from the process and go back to how things were. The problem is that things were bad before your debt review, very bad. That’s why you needed debt review in the first place. More than that, debt review is done via the courts and is a legal process. Once it is begun, it is hard to just walk away from the process. Once the credit providers regularly started getting money each month again they were happy. If you try to mess with that arrangement, they will not react in a positive manner. It is like divorcing your spouse. Once you have divorced them they will be rather surprised if one day they come home to suddenly find you sleeping in their bed again, as if nothing happened. They will probably not be happy to see you, even if you changed your mind after a few years. More than that you have used a legal process (divorce) to change your relationship. The same is true with debt review. Once the legal process is begun the only way to finish the relationship is to finish the process. This has to be done with the help of a Debt Counsellor and all the debts need to be settled.

EXPECTATIONS VS REALITY

DEBT REVIEW IS QUICK AND EASY Some consumers are told that their debts will be settled quickly and the process is easy. After a year or two they grow confused about why it’s taking so long. They may not even know how long their plan to repay their debts will take, this can result in frustration. While it is true that when consumers enter debt review, many credit providers will slash interest rates and will stop charging monthly fees, but this still leaves the thousands of rand in debt that is owed to the credit provider. Paying that off in small amounts takes time. Many debt restructuring plans are made over many years to make the monthly repayments realistic and manageable for consumers. It is important for consumers to realize that they were going to take years to actually settle their debts before they entered debt review. Many would have received judgments against their names, and could have been repaying debts for as long as 30 years. If a consumer has a car then it is not unrealistic to expect to repay debt over 5, 6 or 7 years anyway. These days, many debt review plans are scheduled over 60 months. You can get a copy of your plan from your Debt Counsellor so that you can check how far along you are in repaying your debts.

DEBT REVIEW EXPECTATIONS VS REALITY

MANAGING EXPECTATIONS Debt Counsellors can help their clients have a realistic view of the process by spending enough time actually counselling their clients, spending time explaining the process and educating their clients about the process after the initial consultation. More and more we are seeing Debt Counsellors who host weekly online workshops or podcasts for clients. Other Debt Counsellors have newsletters and emails they send to clients during the process. Others have catch-up sessions with clients and the best Debt Counsellors even organize for their clients to read that Debtfree Magazine each month (we recommend that)! Debt Counsellors can make use of the complete guide to debt review booklet (also from the Debtfree Magazine team) to help their clients better understand the process and to track their own progress. Debt Counsellors can also improve their contracts with consumers to state what they will, and won’t do for the client and what is and isn’t expected of the client. This is an area in the industry that still needs attention.

DEBT REVIEW EXPECTATIONS VS REALITY

DEBT REVIEW COULD EXCEED YOUR EXPECTATIONS You may have entered debt review just looking to regain some control over your finances. You may have been drawn in by the promise of no harassment from credit providers, or the chance to save 60% on your repayments. Sure those promises sound great, but debt review can be so much more than all these things, it can be the hard reset your entire life was looking for. things, it can be the hard reset your entire life was looking for. If you work along with your Debt Counsellor to get the process in place, and keep up payments throughout then, yes, you will get rid of your debt. You may even save thousands of Rand on fees and interest through the kindness of your credit providers. You may, however, perhaps go even further. You may really educate yourself about financial matters. You may learn to budget and manage your money each month – a skill that will benefit you throughout your life. You may learn to save, and plan for a secure financial future. Your family might learn to work together towards a common goal and communicate better than ever... or maybe not. We don’t want to make any unrealistic promises.

DEBT REVIEW LESSON #1

Even if under debt review credit providers may have their collections people call you. You can simply refer them to your Debt Counsellor and end the conversation.

ADR NETWORK SA MEDIATION TRAINING REVIEW The need for mediation, also known as dispute resolution, is growing. Changes to local and international laws are promoting the use of mediation instead of flooding already overwhelmed courts with new legal matters. Most South Africans are fairly familiar with the concept of mediation. The CCMA led the way in regard to labour disputes for many years in South Africa, and in many cultures it is common for two parties to sit down and attempt to work through the problem. There are many forms of mediation, and ADR Network has an online specialty course available in each area. For example, there are course about medical negligence, sporting disputes, discipline at school, Human Rights & Constitutional disputes and even mediation relating to aspects of the National Credit Act (something that greatly interests us). ADR Network SA invited Debtfree Magazine team members to attend their 5 day online training program so that we could share our experience of the training process with our readers.