- Posted by: Admin
- Category: Uncategorised
Over the last few years, pre and post covid19, I’ve received a lot of feedback from consumers who were in financial turmoil, but avoided Debt Counsellors like the plague…
These consumers who were in dire financial duress chose rather to fight their own battles, sadly to their detriment, yet were adamant on refusing to get help from a professional ‘Debt Counsellor’… Can I blame them, no…
Did they make the right decision on dealing with their debt personally? The answer is a resounding ‘NO!!’…
Instead of doing further research on finding reputable, trusted and transparent debt counsellors, they took matters into their own hands and many of them are now blacklisted.
Some of them reached out to us, but as a result of the status of their accounts and the fact that many of them were already in the legal phase (handed over), we could only negotiate on an informal basis, as the National Credit Act, which we operate under and gives us the authority to legally restructure our clients credit agreements, does not allow us to restructure credit agreements where the legal process has already started.
Thankfully, we were able to negotiate with the attorneys on our clinets behalf, on an informal basis, and managed to get our clients a lowered installment.
Here are my top 5 reasons why some consumers have little to no confidence in today’s debt counsellors.
- They simply aren’t transparent
So many consumers who have applied for formal debt counselling are absolutely stunned to hear that their term, in fact, does not have to be five years. They are led to believe this due to many reasons, mostly for the fact that their current debt counsellor wants them in the debt management system as long as humanly possible to make more money off of them.
Personally, I feel this is a blatant lack of transparency on their part…
They will tell the consumer everything they need to know, except the fact that their debt review term is in fact up to them, and not the debt counsellor or a fixed five-year term, as they are led to believe…
You want to work with a DC (Debt Counsellor) who is always and I mean always going to be transparent with you, regardless of whether they benefit financially or not.
Almost one-third of our clients have transferred from other debt counselors (yes you have every right to transfer over to another debt counsellor) because they are simply not getting the service they rightly deserve, but a service that they are also paying for.
This is worked into every single consumer’s debt review repayment and is called an after-care fee. This is for exactly that… An after-care service, until your term is finished and you are now debt free and financially independent again.
2. They’re incompetent
The amount of horror stories we have had over the last few years is also alarmingly shocking!!
We’ve heard it all, from clients debt review payments being more than their original creditor obligations, to clients repayments which are just shy of a few thousand rands of their entire salary.
How this happens is beyond me, unless of course the client, in fact, cannot afford debt review (yes, this can happen) and then may need a more severe financial debt management mechanisms such as sequestration for example…
Again, in this case, the DC has a fiduciary responsibility, to be honest and transparent with the consumer and let them know that debt review is not an option for them.
The fact that the consumers end up paying so much is a clear indication that these types of honest and transparent conversations just aren’t happening with consumers.
Now this post isn’t to tarnish or defame other debt counsellors, because I always tell consumers that for the most part, we all do good work.
However, occasionally you will come across either a new DC or one who simply just doesn’t give a damn about a struggling consumer, and it now becomes about them benefiting financially from you.
For myself and Johan, struggling consumers will always have a special place in our hearts, because we’ve been there… Especially myself.
I know what it’s like to lose absolutely everything and have the banks come to repossess the car and house we were staying in.
One day I was in a big four-story house on the foot of the Gordon’s Bay Mountain in Suikerbossie, and the next I was sharing a room with my Mom and sisters’ kids in her two-bedroom apartment.
I guess after experiencing something like this, you do tend to develop a huge passion and an edge for helping struggling consumers.
So, working with a competent, registered, trusted, transparent, and respected DC is well worth it in the end. It can literally make or break your debt management experience, and determine whether you come out on the other end on the bright side or not.
3. They only care about the money
I’m a big fan of ‘Actions Speak Louder Than Words’ and in today’s economy, there are just way too many companies that are promising consumers and potential clients gold, but end up delivering a worthless pile of dust…
I know it’s easy to be impressed by a savvy sales call or businessman or woman, but you can tell a lot about a company’s values by your very first interaction with them.
Be very wearing in your first conversation…
Are they asking you more questions than they’re making statements or selling why you need to work with them?
Have they taken a couple of minutes to actually get to know you?
Have they taken a couple of minutes to get to know where you were (financially), where you are now (struggling), and how you got there (the problem/cause of over-indebtedness)..??
If there is a genuine lack of interest in you and your financial situation, and I’m referring to the details now, then that’s a sign that they are most likely just after your money.
A DC who is diligent, patient, and caring is most likely someone you want to entrust to restructuring your debt… And I say ‘most likely’ because anybody can put on a show and bullshit their way into getting your business.
So yes, I understand that it’s not easy separating the weeds from the grass, but there are ways to ensure that you only work with a DC who actually cares about your financial well-being and getting you debt free and financially independent as quickly as humanly possible.
4. They don’t care about getting you back on your feet, financially
Again, this simply boils down to money!!
I’m a businessman and have bills just like you…
And just like you, I need to pay those bills with money.
So, I need to make money too just like the next person, but from a business perspective, there’s a responsible and ethical way to do this.
Again, I guess it’s always going to be a lot easier for me because I can not only relate but resonate on a totally different level with someone who is struggling with debt because I’ve been there!!
I know what it’s like to have your whole world torn away from you…
But working with a company that has strong values, such as truly having a heart for helping people become debt free and financially independent again is just going to benefit you in the long run. It really will make all the difference in the world, from the day-to-day interactions all the way to the end of your journey together, where you will be debt free and finally, financially independent again.
From first-hand experience, I know it’s hard to find a great debt management company to work with, but the good news is that if you’ve chosen a company that isn’t living up to your standards and not giving you the service that you rightly deserve and pay for, then you can absolutely transfer over to another debt management company.
Life is way too short to be working with a company that just doesn’t share your values.
5. They don’t practice responsible Debt Counselling
So many consumers, and evidently, even debt counsellors, don’t know that there is a vast difference between ‘Debt Counselling’ and ‘Debt Review’…
‘Debt Counselling’ is assessing and establishing the consumer’s current state and financial affairs. Then based on that, the respective DC determines what the best possible solution for that specific client would be…
As not all consumers who are struggling with debt, need ‘Debt Review’…
‘Debt Review’ is the restructuring of a consumer’s credit agreements (debt contracts with creditors) whereby we extend the term and reduce the interest rates on those accounts, thus bringing the installment that is due for those specific accounts, lower…
It’s important to note that a DC does not reduce the amount of debt you have, they simply give you some breathing room by drastically reducing your monthly debt obligations (payments) to your creditors.
With the sole aim of giving you an opportunity to get back onto your feet financially, while ensuring that all of your essential expenses are paid.
So you can start rebuilding your finances and work on a rapid debt repayment plan to get out of DR (Debt Review) as quickly as possible.
Most DCs don’t engage in this practice because, as stated above, they are only in it for the money…
They care little about you if they don’t stand to benefit financially.
Again, this is why it’s important to work with a DC who really has your best interests at heart and wants to get you debt free and financially independent as quickly as humanly possible.
If you’ve enjoyed this post and found it helpful, please spread awareness by sharing it with a loved one or friends, especially in the trying times we find ourselves yet again after the devastating Covid pandemic we’ve just come out of, as a result of now having to deal with permanent load shedding which has caused many small businesses to suffer and apply for ‘section 189’. Which is the retrenchment of their staff…
I’m also more than happy to answer any further questions or queries you may have, so please do not ever hesitate to reach out to me.
To your financial independence.
André Misrole
Founder and Chief Growth Officer