Debtfree Magazine October 2017 by Debtfree Magazine

South Africaâ&#x20AC;&#x2122;s debt counselling magazine

HOW

LONG WILL IT TAKE? October 2017 www.debtfreedigi.co.za

What you can expect from Hyphen PDA: • Increased Debt Counsellor Profitability • Flawless Systems • Meaningful Reporting • Contented Consumers!

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Chris van der Straaten, Head: PDA 082 557 0437

Malcom Povey, Head: Operations PDA 082 445 5604

Don’t expect to hear an endless amount of “spin” around why things failed!.

“Good things come to those who wait”. “Time heals all wounds”. “Slow and steady wins the race”. All these sentiments which you have, at some time, no doubt heard also apply to paying off debt. Whereas taking on debt can happen basically overnight (with one big mall crawl) getting rid of that same debt can take a really long time. But how long will it take? We discuss that in some detail in this issue as we compare the different types of credit consumers can use and how long it normally takes to pay off that credit. We then compare that with three common mechanisms to deal with debt (including debt review). We also discuss what drives some consumers to leave the process of debt review when it is in it’s very first few weeks. You might be surprised to learn just how any consumers do this. We look at why it is a really bad idea for both the consumer and

the negative effect it has on a Debt Counsellor’s business. Our industry profile this month is with a long standing attorney who has seen the industry grow and change over the years. She offers some advice to both consumers and Debt Counsellors. We also answer a rather common question that we have received from one of our many readers. If you recently entered debt review then you should check that out. It may take you a lot longer than you would like to get rid of your debt. After all, we are becoming increasingly programmed to want instant gratification these days. (Wait 3 minutes for my Mc Donald’s Burger? What is this the stone ages!) That’s the bad news but the good news is that time flies. So, stick with the process, get on with life (not debt) and before you know it you will be debt free.

FROM THE

E D I T O R S DESK

HOW LONG?

NUTSHELL

DREADED DROP OFF

NEWS

ATTORNEY PROFILE

SERVICE DIRECTORY

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C O N T E N T S

HOW LONG DOES IT TAKE TO REPAY DEBT? Different types of credit are repaid over different lengths of time. Smaller debts are often paid quickly while bigger debts, like a home loan, can take decades to repay. Some forms of credit can be used without being charged within the first 55 days and others have sky high interest rates over a few weeks or months at a time. We consider these repayment time-periods and compare that with how long it takes to repay debt through debt review.

HOW LONG DOES IT TAKE TO REPAY DEBT?

REPAYMENT TERMS Buy Now, Pay Later... When consumers apply for credit it is normally because they want to benefit from something now and pay it back later. The time it takes to repay a debt is normally set out in months and is called the repayment â&#x20AC;&#x153;termâ&#x20AC;?. In this series of articles we will deal with the normal repayment terms that are common for credit in South Africa. There are two main types of credit: Unsecured credit which is credit like a loan, a credit card or overdraft facility. You also get secured credit which is for things like car finance or a home loan, where an asset is involved. The general rule of thumb is that the longer you repay a debt, the more you end up paying. This helps the credit provider offset the risk they are taking that you will default on payments during an extended time period.

UNSECURED CREDIT HOW LONG WILL IT TAKE TO REPAY?

DAYS

Some credit providers offer payday loans which need to be paid back at the end of the month when you get your salary.

WEEKS

Short term loans normally have high interest rates to go with their initiation fees. Most of these loans are for smaller amounts and the interest is a small amount as long as you repay the debt quickly.

MONTHS

A popular offering these days are smaller 3, 6 or 9 month loans.

UNSECURED CREDIT HOW LONG WILL IT TAKE TO REPAY?

YEARS

More credit providers these days are offering consumers larger amounts of money in loans that can be repaid over very long time periods. For example, some banks offer up to R250 000 which can be repaid over 60 or even 84 months. Thatâ&#x20AC;&#x2122;s either 5 years or even 7 years. Direct Axis offer loans of up to R150 000 and offer consumers 6 years to pay the loan back. They say that 24% of their clients use a new big loan to pay off all their other smaller existing credit so they can end up only paying Direct Axis each month. Capitec offer up to R250 000, which can be repaid over up to 7 years. In total over all that time you will repay around R447 996 if you get a good interest rate. If you take a smaller loan of R1000 and repay it over 12 months, you will pay around R265 a month (so nearly 3 times the loan amount in the end). ABSA offer clients credit from as little as R250 up to R350 000 over up to 7 years. If you borrow R250 and repay it within 31 days you will only pay R275. If you borrow R350 000 and repay it over 7 years, your payments over all those years will add up to R678 718, including interest and fees.

HOW LONG DOES IT TAKE TO REPAY DEBT?

CREDIT THAT ROLLS OVER Some accounts have an overdraft facility, which allows a consumer to spend a bit more than they actually have in their account. The limits can differ based on each consumer. As long as money comes back into the account pretty regularly each month, the credit provider will let you use the credit and be happy to charge you fees on the debt. You have serious problems only if you stop paying or the credit maxes out. Payback your credit card in full within 55 days and you are not charged for the credit. Miss the deadline and fees begin to apply. Many credit card calculations are based on 18 or 24 month repayment terms.

HOW LONG DOES IT TAKE TO REPAY DEBT?

SECURED CREDIT When you want to buy something big, like a car or a house, then you can get asset back finance from creditors like SA Home loans or any of the big banks. Other than the banks vehicle finance arms, like Wesbank or MFC, many vehicle brands also have their own related finance companies (eg. BMW Finance). If you miss payments then the credit provider will take the asset back from you and sell it to recover some of the funds you owe them, before they chase you for whatever is left over.

HOW LONG DOES IT TAKE TO REPAY DEBT?

CARS Though you can repay vehicle finance over just a few months, most consumers take a 60 month or 72 month repayment term. This means that you will repay the debt over 5 or 6 years. In the past, most credit providers asked for a big deposit to prove you were committed to the process and reduce their risk. In a move to get more consumers, many creditors began to offer smaller monthly repayments and a big balloon repayment in the last month of the credit agreement. A car loan of R100 000 at a low 10%, will cost around R133 386 in total repayments to pay off over 6 years. At 17% it adds up to around R160 172 in total, showing how important a good interest rate is over time.

7 YEARS

30 YEARS

HOW LONG DOES IT TAKE TO REPAY DEBT?

HOME LOANS Consumers normally repay a home loan over 20, 25 or 30 years. As long as they make payments every month for all those years, their home will not be in danger of being sold on auction by the bank.

HOW LONG DOES IT TAKE TO REPAY DEBT?

SEQUESTR ATION When consumers are sequestrated, the legal process lasts 10 years from when the court order is granted, clearing the debt. The debt is cleared because the consumerâ&#x20AC;&#x2122;s assets are used to settle as much of the debt as possible. The consumer also has to pay many thousands in fees for this process. A consumer can later pay more costs and apply to have this period shortened if they are financially sound once again after a number of years (5yrs).

10 YEARS

30 YEARS

HOW LONG DOES IT TAKE TO REPAY DEBT?

A COURT JUDGEMENT Credit providers can be granted a judgment against consumers who do not repay their debts. If a consumer doesnâ&#x20AC;&#x2122;t repay their debts as per their agreement with a credit provider, then the credit provider can start the collections process and eventually send a summons to court. The credit provider can be granted a judgment and can then try to collect the debt from a consumer any time over the next 30 years.

HOW LONG DOES IT TAKE TO REPAY DEBT?

ADMINISTR ATION For debts totalling less than R75 000 consumers can enter Administration and pay off their debts over time. The process has a reputation for being a long one, and can go on almost indefinitely if payments are not more than the 15.5% interest accruing.

60 MONTHS

HOW LONG DOES IT TAKE TO REPAY DEBT?

DEBT REVIEW Debt review is a legal process where a court restructures a consumers debt repayment obligations. Smaller debt amounts can be paid within a few months but debt review can also be used to pay off millions of Rand in debt. A consumer is able to stay in debt review and pay off all their smaller debts until they only have their home loan left, and then they can leave the process and gain access to credit again. Most credit providers like to receive repayment plans over 60 months (5 years)*. Credit providers like to see everyone treated the same, and so even small debt amounts are often calculated over the same 60 month time period. As a result many Debt Counsellors first try see if a plan over 60 months will work for the consumer before looking at shorter or longer repayment options. * Each consumers’ debt review is unique and repayment terms differ as a result. We are using the average and credit provider preferred repayment terms which are not obligatory, since the National Credit Act only stresses the ‘eventual’ satisfaction of debt, which could take many years. Ultimately a court decides how much is paid each month and for how long, not the Debt Counsellor (who makes a suggestion) nor the credit provider.

HOW LONG DOES IT TAKE TO REPAY DEBT?

IS THIS A LONG TIME? When you consider that consumers who have a big loan or vehicle finance were expecting to repay debt over 5 or even 7 years then no, this is not a particularly long period of time to repay all oneâ&#x20AC;&#x2122;s debt. All that is happening is that fees and charges as well as interest rates are being reduced to try help the consumer. Even compared to sequestration, which can take a decade (without credit access) or administration which can take many, many years, the process is a fairly reasonable one which benefits credit providers greatly. Consumers also benefit from reasonable monthly repayment amounts. Credit cards that would previously have been paid over 2 years are often now paid up during the 4th year of the debt review (or sooner). Large loans are normally left at 60 months but credit providers are willing to slash interest rates all the way to 0% to get the debt repaid within 60 months.

Rather than face a judgment collection over 30 years, a consumer can get a debt restructuring court order, and then benefit from a clear credit record down the line. One of the benefits of Debt Review is the ability to get back on oneâ&#x20AC;&#x2122;s feet financially during the process, and then being able to pay more than originally planned. Increasing oneâ&#x20AC;&#x2122;s monthly repayment amount speeds up the process. This allows the consumer to pay off their debt much sooner than proposed. Many consumers are now leaving debt review after 2 or sometimes 3 years.

QUESTIONS FROM OUR READERS

A Credit Provider called and said that my accounts are not being paid. Should I be worried? Should I cancel my debt review?

If you recently began debt review it is important to remember that in month one and two of the process there are fees which will affect payments of your debts. If you have a smaller monthly payment (less than R6000) it is possible that your payments are being allocated to the Debt Counsellor and attorneys (as per your repayment plan- which your credit providers have received). If you get a call from someone saying they are from the credit provider and saying things like this, be sure to check that they actually know what they are talking about. Ask them which PDA is doing your Distributions and how much the court order (or proposal) says they should get this month? Check that with papers you have from your Debt Counsellor. If there is a difference then get them to contact your Debt Counsellor. Remember your debt review is a legal matter and they need to talk to the applicant or your attorneys. Never cancel your debt review without first having a very serious and very detailed conversation with your Debt Counsellor (not just one of their staff members). Leaving debt review in a rush can leave you in a worse financial situation than before the process even started. This can be true even after several years. Talk to your Debt Counsellor.

DEBT REVIEW SCHOOL The person you regularly deal with at your debt counselling firm may not be your official Debt Counsellor. They may just work for the DC assisting them. Learn your DCâ&#x20AC;&#x2122;s name.

THE DREADED DROP OFF The struggle for Debt Counsellors to find new clients to assist, amongst the millions of over indebted South African credit users, remains something of a confusing dilemma. Despite millions of consumers in serious debt trouble, most Debt Counsellors struggle to find enough new clients (each month) to remain profitable. A hidden challenge faces these businesses called “Drop Off” where the DC could see hours, or even days of hard work going down the drain. We consider some of the causes and possible solutions in combating “Drop Off”.

THE DREADED DROP OFF

WHAT IS DROP OFF When a consumer applies for help with a Debt Counsellor, they begin a legal process as set out in the National Credit Act. The process begins with the Debt Counsellor performing a review of the consumers’ monthly expenses and debt situation. Many hours are spent devising a plan that will probably make all parties happy and is affordable for the consumer. Negotiations are entered into and court documents are drafted. Some consumers decide that they do not actually want to continue with the debt review they have just started. Many times they decide this at the end of the first month when payment of the new restructured repayment amount is due. Leaving debt review at this point is called “drop off”. This leaves the Debt Counsellor unpaid for the many hours or even days of work they have already spent on the consumer’s case. Drop off can also apply to leaving debt review suddenly but in this article we will focus on these first few weeks of the process.

THE DREADED DROP OFF

THE GOOD THE BAD THE UGLY

The Good Though figures of drop off are affected by various factors every company will face this challenge. For smaller firms who take on fewer clients, the rate of drop off is traditionally fairly low. But some smaller firms can face up to 50% drop off over time.

The Bad Some well-known and well run larger firms face drop off figures of up to 30%. This means 3 out of every 10 new clients that they do work for, will never pay them.

The Ugly Other firms, who have a poor reputation of focussing solely on signing consumers up for debt review in a hurry, without really explaining the process well, reportedly have up to 60% drop off rate. That means that 6 out of every 10 clients who sign up will never pay a cent and will pull out of debt review as it gets going.

THE DREADED DROP OFF

TIME IS MONEY Consumers who apply for debt review are, by law listed as such at every credit bureau. This will prevent them from accessing further credit (even if they could afford more credit - which is unlikely). Many consumers with this status later struggle to get the Debt Counsellor or the NCR to get the status removed at the credit bureaus. Most of the work for a debt review matter is done in the first 3 weeks of the process. Many hours, and a lot of effort can go unpaid when consumers pull out of the process without ever paying. This means that the Debt Counsellor has wasted a lot of time and expense and it can negatively affect their businessâ&#x20AC;&#x2122; sustainability.

THE DREADED DROP OFF

CAUSES OF DROP OFF There are many reasons why people drop out of the process soon after signing up. Let’s consider some of them.

Some consumers are contacted by debt Counsellors offering debt review and agree to sign up without fully thinking things through. They soon have “buyers remorse” and decide not to go ahead.

Consumers are contacted by agents who mislead them into thinking debt review is actually something else. They may use terms like “debt consolidation” or “negotiations with your credit providers” and not fully and clearly disclose that the process they are talking about is debt review. Consumers later feel tricked even though the process will help them.

Some consumers have low levels of follow-through in all aspects of life. They vacillate between choices and have no commitment. They may initially think they want to sort out their debt situation but later decide they donâ&#x20AC;&#x2122;t really care.

Because some Debt Counsellors do not educate their clients on what to expect, the consumer may not know what to expect each week during the first few weeks of debt review. They may have high expectations which, when not met, may upset them.

THE DREADED DROP OFF

The consumer may not realise that their bank account will be debited by their PDA with a reference code they do not easily recognise (because it is new). They may then go and dispute the debit at the bank and this can cause big problems.

Bad credit provider collections behaviour can also convince consumers that the brand new debt review is not working. Many credit providers allow their collection agents to continue pestering consumers even after they enter debt review.

THE DREADED DROP OFF

Some collection agents may confuse consumers by offering them alternative deals on one debt and ignore all the other debts included in the debt review. The consumer may think the deal on the one debt through the collections agent is good enough to forget about the debt review and all other debts.

Collections agents may tell a consumer that their debts have not been paid since they entered debt review. Because the consumer may think this person works for a big bank they must be more trustworthy than the new debt counselling firm they have started the process with.

THE DREADED DROP OFF

TEST THEM Someone telling you the debt review is not working? Do they actually know all about your debt review? Test their knowledge of your case before believing what they say! ASK: • Who is my Debt Counsellor? • Which PDA are payments done through? • Which court is my application at? • Do you work directly at the bank or for an outside company? • Do you know what amount the court order debt restructuring plan says the credit provider will get this month (and next)? • IF IN THE FIRST MONTH: Do you know what fees I am paying to the Debt Counsellor this month? • IF IN THE SECOND MONTH: Do you know what fees are going to my attorneys this month? Remind the person calling: This is a legal matter before court. Your attorneys should contact my attorneys or the applicant in the court matter who is the Debt Counsellor and not me.

THE DREADED DROP OFF

DONâ&#x20AC;&#x2122;T DROP OFF Consumers

Debt Counsellors

Consumers should not enter debt review without intending to follow through with the process. Debt review is a legal process and once started is hard to simply walk away from without negative consequences.

Debt Counsellors should be careful of pressuring consumer into entering the process to quickly without fully explaining all the benefits and the process step by step. Donâ&#x20AC;&#x2122;t just quickly sign up lots of people and hope that some will follow through with the process. Consumer education and a high level of commitment from both of you are key.

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NCR Vs BMW Finance

NEWS

and obtaining of new plates can be done by the consumer if they do not The National Credit Regulator wish to pay this fee. (NCR) has sent BMW Finance a compliance notice over their “on the The NCR have told BMW Finance to road” fees. A compliance notice is stop including these fees in the cost a scary document telling a Credit of credit to the consumer since the Provider to change something or National Credit Act does not make face possible action at the National allowance for them. They have Consumer Tribunal (NCT) which can gone further and said the Credit Provider had better refund affected result in big fines. consumers who have been charged “On the road” fees basically cover financing fees on these costs. having the dealer get the car registration and license plates taken The NCR have demanded that BMW care of so that the consumer does Finance do an internal audit and not have to handle that. The new provide figures about consumer car owner can then just hop in the affected and the subsequent refunds car and be on the road. Sometimes that will be done. BMW Finance there are other facets to the fee (like say they are not happy with the a tank of petrol) that might also be compliance notice and disagree with the NCR’s interpretation in this included. regard. These fees can amount to a lot of money. Anywhere from R2500 to R6000 or more depending on the dealer. Alternatively, registration

NEWS NCR Call For Quarterly Reports

refused to give SAA an extension of payment deadline on a tidy figure Each quarter Debt Counsellors of R1.8 Billion. If the Airline had submit figures to the NCR about their defaulted they would have triggered clients. The NCR are now waiting on a guarantee totalling R16.4 Billion. the latest quarterly reports to come in. The latest quarter was from 1st of Over the last short while SAA had July till the end of September 2017. about R6.8 Billion in loans that have Now that September has past, Debt all matured at the same time and Counsellors have a few weeks (until Treasury has been working non stop the 15th of November) to submit their to try and get the various lenders to reports. The NCR encourage Debt allow further time for repayment, Counsellors not to wait until the last including Citibank. Halfway through minute to submit their reports and to the year, R2,2 Billion had to be paid hand them in as soon as possible. to Standard Chartered Bank when Completed reports can be sent to they refused to extend their loan to SAA. Citibank then became the dcreturns@ncr.org.za second bank to refuse any such extensions despite Treasury’s’ pleas.

Bailout Sees CitiBank Get It’s Instalment From SAA Government recently gave the ‘go ahead’ to use funds from the National Revenue Fund to shore up bankrupt South African Airways (SAA). An amount of R3 Billion is being used to prevent SAA from defaulting on its obligations. Recently CitiBank

An extra R1.2 Billion working capital has been made available to try to turn things around for the flailing airline. Already the airline has reduced the number of planes in the air and flights from the end of this month, in an effort to see fewer, fuller airplanes flying at better profit margins.

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NEWS RCS and Pick n Pay

strongly consider debt counselling. Rather than plunge further and Pick n Pay has transitioned their further into debt just to put food on popular smart shopper rewards the table, it is much better to slowly card into a clever short term credit and progressively get out of debt. facility. Consumers have become familiar with the smart shopper Pick n Pay are reacting to contracted rewards card and many enjoy the spending by their clients during benefits of discounts on various recession and competition from products and accruing cash back other grocery suppliers who offer points. Working together with RCS, credit (like Woolies and Massmart). Pick n Pay are now offering credit RCS will do the collecting and facilities between R1000 and a carry the risk on delinquencies but whopping R40 000, depending on will benefit directly from any credit charges. Pick n Pay hope to benefit consumers creditworthiness. from their clients adding additional If the debt is paid back within 55days items to their shopping carts. there are no additional charges beyond a very low R10 monthly fee. Pick n Pay have also chosen to forego any initiation fees and are going so far as to offer clients around R200 off on their initial purchase using the credit facility. You will now find For daily debt staff at each centre offering to help counselling news in 3 minutes or less visit you sign up. www.debtfreedigi.co.za

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IN A NUTSHELL

TACKLING CHANGE: ARE YOU A CHANGE AGENT? People, companies and industries land up in trouble because they fail to take the time to reflect and act when change is needed. Change is uncomfortable and at times very painful. But change is necessary. Change is vital for personal growth and business development. The debt review process is difficult primarily because people have to change their lifestyles; they have to adopt new mindsets and new behaviours. As a debt counsellor you not only need to provide financial advice but you also have to understand behaviour from a psychological perspective. According to an article in Psychology Today, entitled Business: Why change is so hard, and how to make it easier, there are four obstacles, pointed

out by Jim Fallon, that get in the way of change, namely, past baggage, habits, emotions and the environment. Firstly, low self-esteem, fear of failure, the need for control and wanting to please others is baggage that often seeds poor spending behaviour. This baggage makes you feel, think and behave like you did as a child as opposed to how you should behave as an adult. Secondly, this behaviour becomes deeply ingrained in the form of habits. Without much reflection, people mindlessly spend and continue to get deeper and deeper into trouble.

“

Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up. ~James Belasco and Ralph Stayer, Flight of the Buffalo (1994).

”

Thirdly, emotions like fear, anger, and frustration also prevent change as people refuse to accept reality. Fourthly, the environment that people are in may not be supportive of change. Friends, parents, children and work colleagues may not support change and in some cases contribute to the reasons why people become over-indebted. As a debt counsellor there are things that you can do to help people change: 1. Set a clear vision – Help define a future state that is clear and motivating for the individual, for example, “by year three, I will be debt free, and still own a home that I can be proud of.” 2. Be honest about the change process – Confirm that it takes enormous courage, determination and at times a ‘leap of faith’ to make

IN A NUTSHELL

TACKLING CHANGE: ARE YOU A CHANGE AGENT? changes. It won’t be an easy process. But the end result will be worth it. Jim Fallon equates this to jumping into cold water. Initially, it’s cold and you regret taking the plunge, but eventually you get used to the temperature, what was uncomfortable is now refreshing. 3. Help identify the obstacles that have led to the problem – Be compassionate in this process; much of what people do is done in an unconscious state. By helping to identify the baggage, the habits, the emotions, and the environment that contributes to bad spending, you will bring these issues out into the open, giving people the opportunity to consciously tackle their own problems. 4. Set goals – they should be specific, time orientated and measurable. For example, “by the end of the year, I will no longer have any credit card or store card debt.” 5. Define the action steps that need to be taken to help people achieve their goals and their vision. At this stage, it is appropriate to prepare a ‘new’ budget and repayment plan that will help the individual reach both their future vision and short-term goals. 6. Don’t stop reminding people along the way and reinforcing the fact that they are making good changes.

As a debt counsellor, you are a ‘change agent’. However, it’s not always easy to understand the complexity of human psychology that gets in the way of good decisions. With the right combination of compassion, support and guidance people can change.

IN A NUTSHELL is brought you by the NPDA Partnership Programme™, designed to support debt counsellors and consumers during the debt review process. For help, contact the NPDA on 0861 628 628. If you have suggestions for topics that you would like covered in future, please email them to info@dcmgroup.co.za If you have found this article useful, go-ahead and share it with your clients. Debt Review Awards Winner 2014 and 2015: NPDA: Payment Distribution; Client & Customer Service; Industry Support & Engagement Care Premier: Debt Counselling Software

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Die Republiek van

SKYT AFRICA Hallo Almal, Verlede maand het ons gepraat oor die vakansies wat voorlê en die verantwoordelike finansiële besluite wat daarmee gepaard gaan. Hier die maand wil ek aan twee aspekte raak wat ons verhoed om by sulke besluite te maak en daarby te hou. Die een is weerstand teen verandering en die ander een is hardkoppigheid. Laat ons nou maar eerlik wees ons is n vreeslike hardkoppige nasie en dit bring n vreeslike weerstand in ons op. Ons kan maklik, wanneer dit ons pas, iemand se raad beskou as voorsê, en niemand sê vir ons voor nie. Jy het reeds die gesonde besluit gemaak om onder skuldberadering te gaan en dit is juis waar dinge begin moeiliker raak, daar is veranderinge wat in jou finansiële lewe moet plaasvind en dan begin die weerstand opbou. Dinge is ewe skielik nie meer “lekker” nie, die skuldberader het my nie dit of dat vertel nie, hoekom word ek geforseer om aan te pas? Hoekom moet ek my lewenstyl verander?

Niemand het gesê dit gaan maklik wees nie, inteendeel dit is n moeilike pad om te stap maar dit is een wat jou van finansiële ondergang gaan beskerm en red. Die oomblik wanneer jy voel die weerstand in jou begin opbou en jy kom agter dat jy verskonings begin uitdink om nie met die program voort te gaan nie bel jou skuldberader, al is dit net dat hy of sy jou moet herinner aan die voordele, die gemoedsrus en die welstand na die “swaarkry”. Al moet jy die elke maand doen, jou skuldberader is daar om die pad saam met jou te loop en hulle neem net so baie trots daarin wanneer die hele proses suksesvol as jy. So ten slotte moenie dat weerstand teen verandering en hardkoppigheid in hardegatheid verander nie en die hele proses opfoeter nie. Dit is nie n pad wat jy self hoef te stap nie, vra raad, vra ondersteuning, deel jou vrese en bekommernisse en kry weer daardie gemoedsrus. Praat met jou skuldberader!

Groetnis. Christo Hattingh Kyk gerus my LinkedIn profile: https://www.linkedin.com/in/christo-hattingh-351a52130/ * Seriously please do let us know if you found this article to be funny/offensive/amusing/interesting feedback@debtfreedigi.co.za

NCPDA2 REG. 2 00 8/01 874 1/0 7

TRANSPARENCY INTEGRITY COMPLIANCE

PAYMENT DISTRIBUTION AGENCY

COMPANY BACKGROUND On 28 August 2008, DC Partner began distributing funds newly appointed by the National Credit Regulator as a accredited Payment Distribution Agent. DC Partner’s business has continued to steadily grow ever since 2008 and is a financially strong company that strives for excellent service to our customers. DC Partner is one of only three NCR accredited PDA’s in South Africa and its operations are based out of the scenic town of George in the beautiful Southern Cape, with satellite offices in Pretoria and Cape Town. At present, the company employs roughly 100 people. DC Partner has a high level of commitment and quality control.

SECURE DI STRIBUTI ON OF DEBT REVIEW FUNDS DC Partner takes pride in providing accurate and timely distributions. After all, the ability to accurately and speedily distribute funds from consumers to credit providers forms the cornerstone of the debt review cycle. Distributions are strictly done according to the distribution plan provided by the relevant debt counselor.

WHY CHOOSE DC PARTNER AS PDA? A client relationship officer is assigned for EACH Debt Counsellor – Single point of contact & communication! We assist to follow up on default clients, unpaid funds and unidentified deposits. National representation – Frequent face to face visits to your office by skilled, trained agents. Automated e-mails which can be sent directly from our system – 17.1, 17.2, proposals, cascades etc. Systematized client statements for each distribution sent as e-mail or sms. Daily Distributions on all clients. 24 Hour access to our system (Including distribution data) from any PC, Cell Phone or tablet with internet access. Individual, dedicated business bank account for each debt counsellor. Multiple management review reports accessible directly to manage your debt review business and processes.

HEAD OFFICE: 59 VICTORIA STREET, GEORGE TEL: 044 873 4530 EMAIL: PDA@DCPARTNER.CO.ZA WWW.DCPARTNER.CO.ZA

KIM ARMFIELD

AND ASSOCIATES

KIM ARMFIELD

AND ASSOCIATES Debtfree took some time to speak to well respected Attorney, Kim Armfield who has been dealing with debt review matters for many years. We asked her a few questions about her practice, her cases and about debt review matters at court.

Why did you get into law?

How long have you been practicing?

Life happens. It was never my intention to study law, but we are not always in control of what happens in life. My first job was as a legal typist at a reputable law firm in Cape Town from there I moved up to legal secretary, head of collections, and started studying at Unisa part time. My previous employers, Visagie Vos & Partners, offered to fund my studies and gave me the opportunity to do my articles with them. Of course, I will always be grateful for this and I remind myself from time to time that it was this grace and generosity that built our practice.

I qualified and started practising as attorney in 1998 and started practising for my own account, after gaining some valuable experience, in 2003.

ATTORNEY PROFILE | KIM ARMFIELD AND ASSOCIATES

What kind of services do you offer / law do you practise? In my almost 20 years of practise I have done a myriad of matters, including collections, general litigation, criminal matters, family law, deceased estates, commercial law (contracts) and more recently family mediation. At present, I specialise in debt review matters and family law, but our practice does attend to various other matters which I oversee (and please note that I generally refer to “our practice” as opposed to “my practice” as it takes a trusting team to make a successful practice). Attorneys and even magistrates had, at the

commencement of debt review, viewed it as a somewhat inferior area of legal practice (in fact, I was once openly asked by a magistrate why have I studied so many years “just to do debt review”. Thankfully I am not too concerned about people’s perceptions and I do not believe debt review to be inferior in any way. I believe this perception has since changed, as lawyers have come to realise how dynamic debt review can be. And at the end of the day, it is all about people, as opposed to lofty academic opinions.

Do you think that consumers are benefiting from debt review? On the whole, absolutely yes. You do still find some â&#x20AC;&#x153;rogueâ&#x20AC;? Debt Counsellors (well, you find that in any industry), but Debt Counsellors are now mostly concentrating on getting the best deal for the consumer. There is a real need for debt review and there will always continue to be a need for it. I also believe that stats will show that debt review does relieve over-indebtedness and many consumers, since the inception of debt review in 2007, have become debt free thanks to this process.

What kind of assistance do Debt Counsellors need from attorneys such as yourself? Guidance. Advice. Support. And sometimes someone to vent to about the NCR or their consumer who is still complaining, even after being offered a lifeline. Sadly, there seem to be some Debt Counsellors who view attorneys as the enemy, and I am really not sure why. We are here to cover your back and help you get that required court order, and much more in fact.

ATTORNEY PROFILE | KIM ARMFIELD AND ASSOCIATES

What kind of assistance do consumers need from yourselves in the debt review process? Our clients are the Debt Counsellors and not, in fact, the consumers. That being said, we still have contact with the consumers to obtain documentation or their signatures on Confirmatory Affidavits. And with the permission of our Debt Counsellors, we sometimes contact them for further information for a Supplementary Affidavit. And then of course there is that errant credit

provider who issues a Summons despite you being under debt review. This sometimes still happens and we assist the consumers directly here, with the permission of our Debt Counsellors.

Are some courts easier than others? Do fish swim? I am going to take it that your question is as rhetorical as mine. There are definitely some courts that are regarded as ‘easier’ than others. Whilst, in theory, a Magistrates is a creature of statute (he has to stay inside the four corners of legislation and may not use his own discretion unless this is specifically authorised in the relevant legislation), in reality Magistrates do, in fact, go beyond the scope of their authority. Sometimes a Magistrate may not have had his ‘Kellogg’s’ that morning and as a result, wants to find fault somewhere with an

application. I would personally like to see more courts taken on appeal so that the industry can become more uniform.

ATTORNEY PROFILE | KIM ARMFIELD AND ASSOCIATES

What kind of things can delay a court application? Most of the delays at courts are as a result of Confirmatory Affidavits not having been signed or lodged at court. There are some other causes of delay, for instance a magistrate may query a budget and want us to file a Supplementary Affidavit, but this is not the norm. mostly court matters move quite swiftly if the application is done right.

Any interesting cases recently? We were recently part of an appeal matter in the Western Cape High Court regarding the question of whether or not legislature intended for interest rates to be reduced by consent between the CP and DC (which we argued in favour of). This matter was, in fact, argued prior to the recent judgment of Sansom vs Mars & Others, but our two judges still have as yet to hand down their judgment. This has become quite moot though, in view of the Mars judgment, although it is rumoured that one of the banks may be taking an aspect of the Mars judgment on appeal...

donâ&#x20AC;&#x2122;t be a twit

http://twitter.com/Debtfree_DIGI

“

Take care of your consumers and keep your attorney close

”

ATTORNEY PROFILE | KIM ARMFIELD AND ASSOCIATES

Have you ever handled reckless credit matters? I have done but Debt Counsellors, mostly, do not wish to take on such matters (for good reason). Success is not always guaranteed. A matter I argued on, quite extensively, was regarding an amount advanced to a consumer (who was no ordinary consumer and owned a farm worth at least R8 million) despite the fact that the bank knew he was not able to afford the repayments at the time. The court unfortunately found that the consumer had voluntarily consented to the advance and could not plead ignorance, as he was clearly an astute and knowledgeable

consumer. We had expected to win based on the requirements of the NCA. And were disappointed. The fact is, most courts are loathe to grant an reckless credit order against a credit provider and I believe this is because they do not want to allow consumers to evade responsibility. However, one needs to assess each matter on its merits.

ATTORNEY PROFILE | KIM ARMFIELD AND ASSOCIATES

Are there any areas of the NCA that you feel will be looked at if/when there is a NCA amendment? Absolutely. I would strongly the suggest the amendment of Section 86(11) to include a provision allowing a debt review court to entertain a Sect. 86(11) application. At present, the High Court has interpreted this provision to mean that it is only the enforcing court that can hear a Sect. 86(11) application (for the reinstatement of an account under debt review). More often than not, the Credit Provider will thus

ensure that they issue summons out of the High Court, which is not as readily accessible (and so very intimidating) to the lay consumer. It would be far more beneficial (and practical) to argue the possibility of reinstating an account before the magistrate who will also attend to the debt review application.

What advice do you have for Debt Counsellors? Do not take chances. Do not get into any deals involving under the table deals. Do not try and take short cuts. There is absolutely nothing legally wrong with a call centre set-up, but take care of it as you would a growing baby. If you get your act together and your motives are right, there is no reason why you cannot and should not have a thriving business. Take care of your consumers, and keep your attorney close!

What advice do you have for consumers? Take responsibility for your actions but never feel ashamed or embarrassed about making mistakes in life. We all do. What is important is to do something about it. Also remember that it is your debt, and not that of your Debt Counsellor. Your Debt Counsellor is there to assist you, but your DC is not there to wave a magic wand and make it all disappear. Follow up on the process, keep track of your payments. Get the vision, stick to the process and you will get out of debt.

DEBT COUNSELLORS ASSOCIATIONS ANNOUNCEMENT BOARD

Regional Meetings Kwa-Zulu Natal: 27/10/17 Western Cape: 07/11/17 Freestate: 20/10/17 Gauteng: 24/10/17 Eastern Cape (PE): 27/10/17 Check the website for details on a possible East London Meeting (8/11/17)

Farmers and communist party join forces to fight evictions: https://tinyurl.com/y73c58mm

www.dcasa.co.za

www.newera.org.za

We will not be holding any regional meetings till next year. Members are encouraged to start talking to clients about the end of the year and not missing payments.

Last month marked the last of our newsletters in Debtfree magazine for now. We will post news here & on Facebook NEWS: The NCR sent an acknowledgement for our fees submission

www.bdcf.co.za

www.allprodc.org

DONâ&#x20AC;&#x2122;T WORK WITH AN OUT DATED VERSION OF THE ACT

UPDATED 2017

We are happy to announce that the Amended National Credit Act booklet is now available via our shop. Get the latest version for only R250.00

ORDER NOW http://debtfreedigi.co.za/product/pocket-sized-national-credit-act-booklet/

DEBT COUNSELLING COMMUNITY SUPPORT

BACK TO SCHOOL For most parents, Januaryâ&#x20AC;&#x2122;s back to school costs are far away and their focus is simply on making it to the end of the year. But families in debt review need to be more prudent and plan better than most families. When a family enter debt review and switch to a cash lifestyle they need to get wise about saving toward upcoming costs since they cannot simply put purchases on their credit cards as many do. But what happens when there just are not enough funds to take care of extra costs even if you are in debt review?

Contact admin@dccsupport.co.za

Debt Counselling Comunity Support have over the last few years been able to help vulnerable debt review families get through this tricky part of the year with help from generous industry sponsors. Debt Counsellors, attorneys, PDAs and credit providers have all clubbed together to help out those deserving hard working, loyally paying consumers under debt review who are feeling the pressure. Once again this year DCCS will be launching an end of year drive to get supplies ready for the January Back to School drive. Vouchers and bags full of clothing or stationery will be provided for those families identified by Debt Counsellors in the community. If you know of any families who might qualify then please contact admin@dccsupport.co.za

Click here to Sponsor a Back To School Pack

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