Debt Counsellors Association of South Africa Webinar
The Debt Counsellors Association of South Africa (DCASA) hosted their first webinar training session today. The webinar is an online training session about Section 71 of the National Credit Act (NCA). Only DCASA members were able to sign up and participate.
Debt Counsellors from all over the country were able to join in the discussion and pose questions and have them answered right away. DCASA made provision for around 100 participants.
‘As with any change in the NCA there was initially some confusion about how to implement the changes’
Section 71 – Amendments Cause Confusion
Section 71 was amended in March 2015. As with any change in the NCA there was initially some confusion about how to implement the changes. There are thousands of credit providers but since the main focus of Section 71 has to do with Long Term Credit Agreements, the main creditors affected by the change are the banks and one or two other creditors (such as SA Home Loans).
The idea of the amendment was to ensure that consumers could leave debt review once all their smaller debts were paid off and that they would not be locked into debt review for the life span of their bond.
‘The idea of the amendment was to ensure that consumers could leave debt review once all their smaller debts were paid off’
In particular, a focus of the webinar was how issuing a clearance certificate in terms of section 71 affects bonds and how they should be calculated when the person leaves debt review.
What About the Car?
The current understanding of the industry is that vehicle finance is not considered a “long term” agreement. This means that in terms of NCA Section 71 cars have to be paid up before the consumer can get this type of clearance certificate and leave debt review.
Since most debt review plans are structured over a very similar time period as the vehicle payments this makes little difference to the overall repayment plan.
An interesting point (for debt counsellors) is that if a credit provider has terminated their participation in a debt review then these do not have to be taken into consideration when the Debt Counsellor considers issuing a clearance certificate in terms of NCA Section 71.
Does the Debt Review Order Have to Be Rescinded?
Two of the larger credit providers who are involved in this type of clearance certificate insist that they want consumer’s debt review court order to be rescinded. This is a point of contention since the debt counsellor is empowered by the act to issue a clearance certificate and the Act does not mention rescinding any order. Once a clearance certificate has been issued it is argued that the debt review has ended. DCASA continue to engage with these creditors in the hopes that they will change their minds on this step. This step costs money and takes a lot of extra time so Debt Counsellors would like to save the consumer time and money by avoiding this seemingly unnecessary step.
Ongoing Training For Debt Counsellors
The webinar is part of DCASA’s ongoing training of members. After the presentations there was a short test to understanding and so that DCASA can issue members who attended “points” on their ongoing training programme. Those attending said that they benefitted greatly and would like staff members to also be able to access such training.