The African National Congress is starting its “dispute resolution process” in a bid to address the a.
THE National Debt Mediation Association can do wonders for you.
Magauta Mphahlele, the NDMA's chief executive, champions the cause of consumers whose debt-counselling goes wrong.
The single mother of two says her calling to restore the dignity of consumers is made easier by a supporting network of other single mothers .
She is also grateful that her children understand that she helps people from being evicted.
Mphahlele's office helps consumers deal with the administrative bungling in debt counselling cases by debt counsellors, payment distribution agents or credit providers.
Her team has brought smiles to many people by negotiating the stopping of repossessions.
"Consumers are not aware of the many options available to them, the first and most important being to contact the credit provider as early as possible," Mphahlele says.
"Responding to letters of demand and summonses is also a big weakness that leads to consumers getting into even more trouble."
Mphahlele says the mandate of her office is to ensure that affiliated credit providers, which include most of the major banks and retailers, comply with their code of conduct, which requires them to assist over-indebted consumers.
This includes applying measures to reduce the debt burden and working with debt counsellors to ensure a successful process
"At a case level we have yielded good results," she says. "Affiliated creditors are helpful and cooperative and sometimes bend over backwards to help consumers even when they are within their rights to attach and sell a consumer's house or car.
"We like it. We wish they would never stop and that as time goes by assisting consumers will become normal business practice. We have a very meaningful relationship with creditors, which we aim to build on in the interest of consumers."
Mphahlele says her office mostly intervenes on behalf of debt counsellors who represent consumers. Sometimes the problem lies with a debt counsellor who does not formulate proposals correctly and does not follow up on the case.
This results in creditors rejecting the proposal or terminating the process and taking legal action.
"We then mediate between the parties and rectify the situation. No one wants to lose their assets, especially when there are avenues to help them rectify the problem."
But she warns consumers to take responsibility by not taking on too much debt and when in debt counselling to monitor how the counsellor handles their case and, most importantly, to ensure that they meet the credit provider halfway by making lifestyle changes to free up money to pay their debt as quickly as possible.
Her office has helped many people, including Nomonde Ndlela, who was on the verge of losing her house.
Ndlela, 40, is a divorced mother of two from Ebony Park, Midrand Township, Gauteng.
Ndlela had a joint bond with her ex-husband before the divorce. The divorce settlement entailed that she retain the house but she was liable for the monthly payments.
She fell behind on the repayments, which led to her being summoned. Since she could not afford to settle the arrears and had no reason to defend the matter, judgment was granted against her.
Realising that she was going to lose her home Ndlela made an arrangement with the bank to pay the monthly instalment of R3700 plus more. But she failed to pay her other credit providers and they threatened her with the legal action.
Ndlela heard about the NDMA from her debt counsellor, who was helping her restructure her debt obligations, Mphahlele says.
"By then she had broken the arrangement with the bank while trying to service all her others debts, Mphahlele explains.
She says though banks are sometimes within their legal rights to attach and sell a house they can on occasion be persuaded to cancel because of other serious considerations.
The debt counselor sent a notification to all credit providers that the consumer was in debt review in terms of the NCA. The counsellor also provided a restructuring proposal that the bank rejected, citing the fact that the home loan account was precluded from debt review as the legal action had already commenced.
Subsequently the property was declared executable. Ndlelastarted paying R1300 monthly on the home loan from the date of the debt review application.
The sale in execution was later scheduled and in a desperate measure to cancel the auction Ndlela asked the NDMA to intervene.
"It was after the NDMA's intervention that the bank and their litigation attorneys reconsidered the proposal and cancelled the sale though the account was precluded from debt review," Mphahlele says.
l Call 0860-111-6362 or e-mail email@example.com for advice and assistance on handling over-indebtedness or to lodge a complaint against an affiliated credit provider. Also visit www.ndma.org.za