How to escape from creditors pestering you
But do not avoid answering your phone
LAST week we promised you another instalment on debtors' rights while they are under debt review.
Debt should not rob you of your rights. Even when in debt consumers still have the rights to dignity and a life free of harassment.
In this regard Soweto resident Dorothy Mkhwanazi wrote to Consumer Line complaining about the harassment, she says, she has had to endure from JM Attorneys.
Mkhwanazi says she has fulfilled her end of the bargain by paying her monthly instalments, but, she adds, that has not stopped the harassment. She also believes she has overpaid her debt.
She says she does not even receive a monthly statement from the attorneys reflecting what her balance is.
Mkhwanazi says the company from which she borrowed money admits that she has overpaid her debt.
Credit provider Blue, she says, has even offered to give her a refund of R5,600. Despite that, she says, the attorneys continue to hound her over the debt.
"To tell you the truth, I am not happy with the way I am being harassed by these attorneys, I have repaid more than R25,000 for a R8000 debt," Mkhwanazi says.
Debt counsellor Deborah Solomon says debt does not deprive consumers of their rights.
She says consumers have the rights to dignity and a life free of harassment.
Additional consumer rights are captured in the the National Credit Act (NCA).
She says: "One [of the rights] is the right to receive assistance from a debt counsellor and another is the right to apply for debt review."
Debt review, Solomon says, is a signal to a creditor that the consumer is taking serious steps to deal with his or her debt.
She adds that the process gives consumers important relief mechanisms.
For example, a debt counsellor can invoke the "in duplum" rule for their clients.
"This means that interest charges must stop running once unpaid interest equals the outstanding capital, in other words, this rule puts a cap on the debt," Solomon adds.
She says the NCA extended the protection by preventing other extras being piled on top of the capped debt - extra charges such as initiation fees, service fees, credit insurance, default administration charges and collection or legal costs.
Solomon says that is a significant protection as many families become desperate because no matter how hard they try, they simply fail to pay off their debts as interest and other charges just add up.
"Other protections also apply. For example, a consumer has the right to leverage all the debt counsellor's resources to ensure the most effective response to all issues relating to their debt," she explains.
Consumers should therefore share all information with the debt counsellor, in writing, to ensure appropriate action can be taken.
For instance, incidents of harassment should be written down. Once a debt review starts the hounding has to stop.
The NCA limits the creditor to three phone calls a week, all between 8am and 5pm; NOT at night and NOT on weekends.
If harassment persists, the debtor has the right to inform the debt counsellor who can go to the National Credit Regulator to put a stop to harassment.
With a debt review in place, goods can no longer be repossessed - another important right.
To enjoy protection from repossession you must agree to a debt repayment plan in consultation with a registered debt counsellor and then make full payment every month.
Consumers enjoy several more rights - including the right to change debt counsellors at no cost.
These protections will be covered in our next article about this sensitive and emotional topic.
Readers who are eager to find out more about the issue can also consult the debt counselling portal by visiting: www.thedci.co.za