What is a problem debt counsellor and what can I do about it if I am with one?
Updated: Jun 1, 2021
When a person goes into debt counselling, also known as debt review, it is because they are having difficulties meeting their monthly debt payments.
There are many highly rated and very ethical debt counsellors who do an excellent job supporting their customers, but unfortunately there are some that range from plain useless to outright crooks. This article will help you to understand what to expect from a Debt Counsellor and what to do if your Debt Counsellor is not delivering to you.
What should I expect from my debt counsellor?
In the beginning
Debt Counsellors must perform certain tasks to earn their fees from customers:
● At the beginning of the relationship the Debt Counsellor must take time to understand the
circumstances, needs and aspirations of their customers.
● They must then formulate a plan specific to that customer. The plan will take into account all of the customers' circumstances as well as the need for the customer to repay their debt as quickly as possible but must also take into account the fair treatment of the customer’s credit providers. If your debt counsellor has not done this then this is already a warning sign of problems on the horizon.
● The Debt Counsellor must then enter into a negotiation process with credit providers to get them to accept the plan. This involves first sending notices to get up to date information and then making a proposal. If all the credit providers accept the proposal this is excellent, but it is not unusual for one or more of them not to accept. When this happens the Debt Counsellor will still go ahead and let the Court decide. Debt Counsellors must keep their customers up to date on their progress and if you have applied for Debt Counselling and are not receiving regular updates then this is a warning sign.
● The Debt Counsellor must apply for an Order either from the National Consumer
Tribunal or from the Magistrate’s Court. If the Debt Counsellor has not done this within sixty
days of the customer applying for Debt Review then there are serious consequences. The legal protection over assets that Debt Review offers falls away after sixty days if the case is not set down. Credit providers may also then take legal action to recover the debts.
If fifty days have elapsed from the date of the application and the Debt Counsellor has not
notified a customer that the matter is set down then massive alarm bells must be ringing for that customer.
Throughout the debt review
The Debt Counsellor is responsible to assist the customer with all matters relating to their debt and specifically any queries from credit providers related to the debt and the debt review.
● They (the Debt Counsellor) must be available to their customers to answer questions and to mediate in any issues between the credit provider and customer.
If a Debt Counsellor is not willing to do this then customers should be unhappy about it.
● Debt Counsellors must also review their customer’s situation and repayment plan whenever the customer’s circumstances change and at least once a year if circumstances have not. This review should not just be lip service but a genuine refresh of what was discussed in the beginning. If the Debt Counsellor has not done an annual review then the customer is not receiving the service they are paying for.
And the money?
Debt Counsellors are not allowed to accept payments from their customers for money intended for credit providers.
● The Debt Counsellor must enroll their customers with a Payment Distribution Agent (PDA)
that is registered with the National Credit Regulator (NCR) and all payments must go through there. If a Debt Counselling customer is paying money intended for credit providers to a Debt Counsellor the is a serious and urgent problem.
● If there are any problems with the PDA not distributing the customer’s money then it is the
responsibility of the Debt Counsellor, not the customer to sort the problem out.
● Debt Counsellors must also help their customers to negotiate a lower payment, if the
customer has difficulty in making their monthly payment, even temporarily.
What do I do if I am stuck with a bad debt counsellor?
The good news is that you are never stuck with a bad debt counsellor.
Every person who is under Debt Review has the right to lodge a complaint and / or change
their Debt Counsellor for whatever reason they wish.
If your Debt Counsellor is not delivering to your satisfaction you can lodge a complaint with the NCR by filling in a Form29 at this link:
If want to change Debt Counsellors, click on the link below to set up an appointment to discuss moving to 58-eight. 58-eight offer a highly professional service that delivers everything mentioned above and then some.