What to Consider When Selecting a Debt Management Company
Selecting the right debt management company is essential in the debt review process. The debt management organisation and Debt Counsellor you partner with is a key in the creditor negotiation process, so knowing the organisation and person you select to represent you has the knowledge, expertise and experience to help you improve your financial standing is crucial.
Here are some factors to consider when choosing a debt management company to partner with to tackle your debts.
Are they registered with the NCR?
The most important thing to consider when selecting a debt management organisation is whether the company and its Debt Counsellor are registered with the National Credit Regulator (NCR). This is crucial as all debt counsellors who operate in South Africa must by law be registered with the NCR.
There are unfortunately many businesses who attempt to get around this only having one registered debt counsellor and utilising other non-registered staff to do all the debt management administrative tasks.
Make sure that the person you are dealing with is in fact an accredited debt counsellor. You are allowed to ask any debt counsellor to provide you with their registration number or alternatively you can visit the NCR website. They have a database you can search, where all accredited debt counsellors are listed. This is a free service.
You can check the NCR data base to see if a person is a registered counsellor by visiting their website here: http://www.ncr.org.za/register_of_registrants/registered_dc.php
Track Record
Knowledge and first-hand experience of the debt management process is key to a seamless and more effective experience.
Don’t be afraid to ask the debt management company and/or counsellor questions to establish their level of expertise and experience. Remember the road to becoming debt free can be a long one and choosing the right person or people to partner with is a big part of the process.
Below are some questions you can ask the debt counsellor you are considering partnering with:
- How long have you been a debt counsellor?
- What other experience and/or qualifications do you have?
- What made you decide to become a debt counsellor?
- Are you registered with the NCR?
- Do you have any other experience in the financial services industry?
The above questions should give you a good idea as to whether the counsellor you are considering will be a good fit or not.
Confidentiality
When you work with a debt counsellor or company you share a lot of personal information about yourself and financial situation, as a result it is imperative that you trust the person with this private information.
If you are worried about your personal information and how it is stored, you are allowed to ask, and they will need to provide you with this information as per the POPI act.
Customer reviews or references
To really understand whether the debt management company or counsellor you are considering is worth partnering with, you need to do some research, check customer reviews and ask for references.
There are many online platforms such as Hellopeter, that you can check to see how others have experienced working with the company you are considering and this should give you a good indication of what you can expect.
General and Financial Considerations
Fees: Be sure to check that the fees of the debt management company you are considering are in line with the fee structure prescribed by the National Credit Regulator and that there are no hidden or additional costs.
Legal representation: Another consideration is a lawyer. It is important to ask your debt counsellor if they have a working relationship with the lawyer or law firm who will be handling your case or if you will need to find your own representation.
Payment Distribution Agency (PDA): A PDA is the organisation that distributes your monthly debt repayment to your creditors every month. There are many different PDAs, and you are allowed to ask who the PDA is that your selected Debt Management company uses.
Know your rights: You are allowed to ask at every and any stage in the process to see statements or a breakdown of how and where your repayments are going. Remember he debt management process is about improving your financial situation and if this information is withheld it should be a red flag.