What does Debt Review cost?

What does Debt Review Cost?

When it comes to fees, you will be happy to know that the National Credit Act regulates how much a registered Debt Counsellor can charge a consumer looking to run through the Debt Review process.

The fact that the fees are regulated is a good thing for anyone looking to enter the process.
It means that nobody can run a dodgy scam and overcharge unsuspecting South Africans looking for some financial relief.

As a consumer it’s important to note that there are 3 different types of fees a Debt Counsellor can legally charge.

Let’s get into them one by one:

Your first restructured debt repayment will be paid to the debt counsellor.
You don’t have to find the money.

Restructure Fee

The whole idea with the Debt Review process is to be able to help over-indebted South Africans restructure their monthly debt repayments. A lower repayment to creditors means a better cashflow situation and room to breathe.

A registered Debt Counsellor is legally allowed to accept the 1st restructured repayment as compensation for the work involved in getting the consumer through the Debt Review process. The amount is capped at R8 000.

Here is a quick example to better illustrate the point.
Sue has entered the Debt Review process. She was paying R10 000 per month to her creditors and was legally over-indebted. ABC Debt Counsellors restructured her monthly debt repayments with her creditors and now Sue only needs to pay R5 000 per month. ABC Debt Counsellors are legally allowed to accept the first re-negotiated repayment amount of R5 000 as compensation for the work. This amount is capped at R8000.

Can ABC Debt Counsellors charge any more than the once off restructure fee? Yes, they can. They can charge an ongoing fee.

Ongoing Fee

A registered Debt Counsellor is also allowed to charge an ongoing monthly admin fee for services they provide during the months or years it will take a consumer to repay their outstanding debts. These ongoing services will differ from one Debt Counsellor to the next, but for the most part will include:

Making sure the creditors are paid every month.
Keep you the customer informed of outstanding balances.
Having the Debt Review status lifted once all monies have been paid back.

This fee is 5% of all monthly repayments made to creditors during the debt repayment term but is capped at R450 per month.

Let’s get back to Sue for a second. Her new debt repayment plan is R5 000 per month. ABC Debt Counsellors will charge Sue 5% (which works out to R250 per month) for ongoing services they will provide during the time Sue is in Debt Review.

We charge an ongoing fee and will discuss with you why and what we do for that fee in more detail when you get in touch with us.

Upfront Admin Fee

An upfront admin fee of R350 can be charged to handle your Debt Review application. This is basically a fee for the time and effort it takes to complete your application. Paperwork is admin intensive and takes time. That time needs to be charged for. We charge an admin fee.

What does Debt Review cost?​