He owes R69,000 - debt counsellor

A WEEK ago Consumer Line published an article in which we highlighted the plight of a Gauteng man who claimed he had found himself in even bigger debt after going under debt review.

Daniel Mokgopo claims he has paid R201,174 since March 2008, but his creditors were only paid one or two instalments.

He claimed that all his debt, when added up, totalled R180,000 when he went under review.

His debt counsellor has now responded, shedding light on why Mokgopo is still indebted to his creditors.

It has transpired that Mokgopo has already paid back a sum of R187,332, and still owes his creditors R69,000 because interest payments have been levied against him - so his creditors are now harassing him for payment.

Mokgopo contributed to his situation because he reduced his re-payment of R4,614 to R1,500 and had done so contrary to the advice of his debt counsellor.

Eugene Alt of Keyfin, who was responding on behalf of Darren Peetz, Mokgopo's debt counsellor, said Peetz had complied with the provisions of the National Credit Act.

He said Mokgopo applied for debt review at a time when debt counsellors and credit providers did not understand the process.

He said there was some resistance by credit providers. Some responding to the request of debt rescheduling, while others ignored the request.

"In an attempt to negotiate a repayment plan an offer was sent to all credit providers along with a proposed payment plan.

"Not all credit providers offered consent on the proposed payment plan. Negotiations were [then] entered into to try and persuade them that Mokgopo could not afford a higher instalment and live a sustainable life," Alt said.

He said the act instructed the debt counsellor to make a report available to the mMagistrate's court for an order.

Unfortunately there was no indication or instruction of how such an application should be brought to court at the time, he said.

"It was during September of 2009 that the first declaratory order of Judge Ben du Plessis, reached our shores with instructions of how matters should be brought to court.

"By the end of October 2009 every magistrate in South Africa had his own interpretation of the declaratory order, which caused mayhem in the industry of debt counselling," he said.

He said Mokgopo's matter was prepared on time but the Randburg Magistrate's Court only presided over it on July 7 last year.

He said on the day of the hearing Mogkopo instructed their lawyer, Jackie Molefe, that his application should be placed on hold since he, in his own opinion, has paid up all his debt.

"This created confusion in the office as all his credit was indeed not paid up," he said.

Alt said during the preparation phase, Mokgopo reduced his payment towards his debt restructuring without the knowledge of the debt counsellor.

He said there was a miscommunication that resulted in Mokgopo thinking he had paid off his debt.

Alt said the misunderstanding could be is attributed to the new system when the debt counsellor was migrating to the Payment Distribution Agent.

He said personnel had issued a misleading statement to Mokgopo, saying his debt was paid up.

He said they tried to explain what had happened and the correct details were forwarded but he ignored it and kept his re-payments as initially agreed on.

"My office has on various occasions communicated with him and in detail explained why the PDA in one occasion portrayed a wrong payment," Alt said.

He said the corrections were sent to him adding that the R1500 he now pays does not even cover the interest on his debt.

"It is not a pleasant experience to defend yourself against your own, specifically after Mokgopo's debt review was a example of how a negotiated restructuring can be accepted in the credit market without any adversity.

"It needs mentioning that Mokgopo's case would have been a resounding success story had he continued to adhere to the advice of his debt counsellor," said Alt.