WHAT WILL IT COST YOU?
With any professional service, it is reasonable to expect that professional fees will have to be paid when a service is rendered. As with any service this is very true with Debt Review.
The Registered Debt Counselor has NCR guidelines, and commonly make use of agreed industry fees* along with suggestions from the National Credit Regulator to price their services. The costs for debt review are not very high, as the idea is to help debt stressed consumers commonly known as over-indebtedness, get out of debt as soon as possible, and not add more expenses for consumers. The fees involved are calculated and built into each consumer’s debt repayment plan and is based on how much they can afford end up repaying each month towards their debt. This means that the debt counselors fee repayments are simply part of what consumers repay each month not over and above that amount.
“The reasonable cost of debt review is quickly outstripped by the saving on account fees and charges that consumers receive. With consensual interest rate reduction under debt review becoming the norm, the long term financial benefit to consumers can run into thousands of Rand’s”.
The industry has set up a fee structure which makes allowance for consumers who have less money and repay less money and repay less towards their debt each month, to pay their Debt Counselor a smaller amount in professional fees. Even those consumers, who have more and eventually pay a higher amount toward their debt because they can afford to do so, benefit from agreed caps on fees. Let’s look at some examples of what debt review might cost a consumer or couple. Couples make a joint application and don’t have to pay two sets of fees.
Being able to cover all your basic needs at home removes a huge amount stress and the consumer can focus on work and getting their lives back on track. With any Debt review budget it help reduce any wasting of funds that can go towards your debts. The goal is to get you out of debt review as quickly as possible.
EXAMPLES OF DEBT REVIEW COSTS
| Scenario 1
Original monthly debt repayment obligation: R5000.00 |
Scenario 2
Original monthly debt repayment obligation: R10000.00 |
Scenario 3
Original monthly debt repayment R20000.00 |
| Restructured Debt Review
Repayment Amount R2000.00 |
Restructured Debt Review
Repayment Amount: R4000.00 |
Restructured Debt Review
Repayment Amount: R8000.00 |
| Application Fee: R50 | Application Fee: R50 | Application Fee: R50 |
| Debt Counselors
Professional Restructuring Fee (Once off in Month 1) R2000.00 |
Debt Counselors
Professional Restructuring Fee (Once off in month 1) R4000.00 |
Debt Counselors
Professional Restructuring Fee (Once off in month 1) R6000.00 – Fee cap reached |
| Monthly After Care Fee (from month two onwards):
R100.00 (5% of the repayment amount for 24 months then reducing to 3%
|
Monthly After Care Fee
(from month two onwards): R200.00 (5% of repayment amount for 24 months then reducing to 3%) |
Monthly After Care fee (from month two on wards): R400.00 – Fee cap reached
(5% of the repayment amount for 24 months then reducing to 3%) |
| Fee if restructuring consumer’s budget allows for full original debt repayment each month:
R300.00 (also known as rejection fee, since further debt counseling is not needed) |
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| Legal Fees: Varies Debt review matters go either to court or tribunal.
Cost can apply and are disclosed to consumers in advanced. |
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| NOTE: V.A.T May be applied by the Debt Counseling Firm to fees. | ||
