If you’re getting cold-called, or even if you called into a specific debt management company for assistance and got quoted an amount that almost halves your monthly debt obligations because you’re struggling with debt…

Be very very careful!!

Now yes, as debt counsellors we are able to drastically reduce your monthly debt repayment, and we can do this ranging anywhere between 45% – 65% off of what you’re supposed to pay towards your debt each and every month.

But not without first practising responsible and ethical debt counselling!!

The practice of responsible debt counselling consists of finding out where you came from, financially that is, where you are now (struggling with debt) and how you got there (what caused you to become over-indebted in the first place), e.g Covid19 or perhaps the loss of a spouse, or large unforeseen medical emergency, etc.

Once we understand this and know exactly what is happening with your accounts and whether or not you are in good or bad standing with your creditors, this gives us a better indication as to what is most likely going to be the response from your creditors.

The danger of not fulfilling this critical step in the whole debt management process is that, if you were to get quoted a certain amount from a call centre agent over the phone, before taking a deep-dive into your debt, the very beautiful and appealing “50% off” (a phrase often used when quoting this to over-indebted consumers) in most cases, doesn’t stay at 50%…

It always goes up afterwards!!!

One of the key problems that arise is after 2/3 months have passed, you will get an email (not even a phone call) from them stating that your instalment needs to unfortunately increase…

Now to you, this won’t make sense, because they never explained it to you, because the whole critical step of practising responsible DEBT COUNSELLING, never actually took place!!

You see one of the processes we go through in getting your debt repayments lowered is actually negotiating with your creditors… We negotiate on the interest on the account as well as the new desired term. After which we then agree on a final amount the consumer (you) will be paying each month.

And you may not be a business person, but I’m sure you know that in any negotiation, both parties have to be happy in order for there to be a transaction or successful negotiation.

What these guys do is they only ensure that you are happy because they know that you are under huge financial duress, and are probably in a state of mind where all you can think of is getting out of your extremely difficult situation.

So they only tell you what you want to hear…

But they leave out the fact that your creditors still have to give their input and often, have the last say.

Then what happens is that your creditors are not happy with the amount they’re receiving, probably on many of your accounts, which then leaves them to give you the bad news, in that you have to, unfortunately, increase your instalment or they will have to terminate your arrangement with your creditors.

In the meantime, you have been boasting to family, friends, and colleagues as to how amazing these guys are, and more importantly, you’ve budgeted your life around this new amount, and now all of a sudden you are expected to pay a larger amount.

Now obviously, this amount you naturally cannot afford…

This is why it boggles my mind when I hear stories like this where consumers are given reduced amounts, yet cannot afford them… Surely that makes no damn sense and defeats the principles and whole idea of working with a debt counsellor in the first place!!

Right..??

Now I’m not saying all of these guys are bad because, for the most part, we all do really good work in helping struggling South African consumers become financially independent again.

However, if you’re ever in a position where you or a family member, friend, or colleague is in need of professional assistance with regards to their debt, please ensure that they’re aware of this strategy used by many unscrupulous debt management companies out there.

It’s also imperative that once you hop on a call or go see a debt specialist in person, you are entirely and 100% confident and understand the entire process and how it will impact you. If you are not left feeling 100% sure, you are most likely working with the wrong debt specialists and it would be a very wise decision to find a different one, who is transparent and honest with you.

More so, be sure to work with a debt specialist who has your best interest at heart, and not just theirs…

I hope this post helped and brought some light to what may be a seemingly dark tunnel if you’re struggling with debt.

Please do reach out if you found this post valuable by leaving a comment or sending me an email or DM on one of our social media accounts.

I check all of my emails personally as well as my social media and I guarantee you that I will personally respond to you…

Have an awesome day and Heritage weekend ahead!!

To your financial independence…

Andre Misrole

Founder