Want to Be a DC? | The Legal Side Of Debt Review

Debt Review is a legal process and since 2009 all debt review matters head to court or the NCT.

The idea is to either do some negotiating with credit providers for good client concessions, or submit to court and ask the courts to make the call (but without changing interest rates).

By far the vast majority of Debt Counsellors enter some negotiations with credit providers (perhaps using the DCRS system or a Pro Rata calculation). Proposals and replies are then included in a court application to the Magistrates Court, especially if not everyone is 100% happy or to the NCT if the consumer is an 86(7)(b) case.

Debt Counsellors who are also attorneys, are able to offer both debt counselling and legal advice. Those who are not attorneys will want to find a good attorney to work with (preferably one who has good correspondents across the country).

You will want to find someone whose pricing matches their services, and discuss how consumer funds and billing will be handled.

“We highly recommend that you choose an attorney firm with extensive knowledge and experience in this industry.  Working with a firm that has inhouse debt counsellors overseeing and assisting their attorneys can make a great difference, as they know how important it is to ensure that all information on the court documents is correct to secure your court orders.  Having a vast amount of experience in credit law will give them the unique advantage to offer you and your consumers the best possible service and solutions to any problems you might face”. – Adri de Bruyn (Attorney & Debt Counsellor at DC Experts)

Remember that you may take on clients from across the country, and will need attorneys who understand debt review to represent you in various courts. Hopefully your main attorney can help organise correspondent attorneys where needed. Of course, there will be costs that apply for them to represent you and the client.

At present, the industry “norm” (since 2007) is to draw fees for the initial court order from the 2^nd payment from the client. The fee guideline from the NCR differs slightly in its wording. Still, at present, attorneys insist on payment upfront, and this is traditionally the month when such fees were calculated into repayment proposals to credit providers because, they like to see what the fees are and know exactly when they will be drawn.

Note: Credit providers often get upset if they have to wait longer than 2 months to start to receive payments (Month 1 for the DC’s fees and Month 2 for the Attorneys Fees). Though this is not the current wording of the NCR’s Task Team guideline it is common to run into problems if they have to wait longer. Large legal fees can delay the funds being distributed, and may require even more legal work.