What fees can a Debt Counsellor ask during the Debt Review process?

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Phase 1: Application Fee 

• R50.00 paid upfront when you sign the Form 16 for Debt Counselling.

Phase 2: Administration Fee

• R300.00 paid upfront once you’ve applied via Form 16.
• The Debt Counsellor assesses your financial situation and notifies credit providers of your debt review application.
• Most DC’s don’t usually charge this fee upfront, but rather include it in their Month 1 charge (discussed under Phase 3)

Phase 3: Determination Fees

(This consists of a Restructuring fee and possible reckless lending fee)

• The Debt Counsellor calculates new repayment amounts for each credit provider.
• The restructuring fee for this phase equals your first month’s total repayment amount but is capped at R8000 (excl. VAT) for single applications or R9000 (excl. VAT) for joint applications.
• Restructuring fee is paid in the first month after submitting proposals to credit providers.
• Covers drafting proposals, communicating with credit providers, and updating systems.
• Reckless lending fee of R1500 excluding VAT if you request an investigation into reckless credit. Payable in Month 1 or 2 depending on the full repayment amount.
• This fee is not the norm and is purely asked when a Consumer requests a Debt Counsellor investigate the possibility of Reckless Credit.
• Do not be startled when payment to your Credit Providers does not occur in the first 1-2 months of the process, as per the reasons stated above and below.

Phase 4.1: Legal Fees for Magistrate Court Application

• Paid in Month 2 or 3 depending on the full repayment amount and the NCR suggest that it aligns with your disposable income and be negotiated with the Attorney. (Debt Counsellor must include this amount on the application form and many use a tiered fee amount and ensure creditors still receive their first partial distribution within 60 business days of the application to ensure the process is fair to all parties)
• Ensures legal protection for your debt review process through a court order.

Phase 4.2: Legal Fees for Tribunal Matters

• R500 + NCT filing fee if opting for the National Consumer Tribunal process, requiring full consent from all credit providers to utilise this route.

Phase 6: After Care Fees

• 5% of your distributable amount (the fee determined at Phase 3, capped at R450 per month. Excluding VAT)
• Covers ongoing administrative work throughout your debt review process.

For detailed information, refer to the Debt Counselling Fee Structure Guideline.

We hope this clarifies the fee structure and helps you understand the costs involved in debt counselling.

Debt Review is a regulated process under the National Credit Act with capped fees. Any entity that is not registered but engaged in activities related to Debt Review may be in violation of the law. The Debt Review process is legally binding for all parties involved. Unfortunately, unregistered entities may offer unrealistic services without fee guidelines, putting vulnerable consumers at risk of financial abuse. It is important to always verify the person’s NCRDC Number and ensure they are registered with the NCR. #consumereducation

– Vanessa Johst ( Operations Manager)