Debt Management Agency - what does a debt management agency charge?

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What does a debt management agency charge?

Debt Management Agency - what does a debt management agency charge?

 

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Debt management is a surprisingly affordable service. If one considers the benefits of debt management, one would expect debt management agencies to charge an arm and a leg. Luckily for consumers they do not, in fact the fee prescribed under The National Credit Act, and in the code of conduct of the DCASA are minimal and designed to be affordable to consumers who are having financial difficulties due to debt.

 

The first fee applicable is a R50.00 application fee in order to assess whether or not the consumer qualifies for debt management. If they do not, a R300.00 rejection fee applies. These two fees are recommended under The National Credit Act and are non-refundable.

 

After the application, a restructuring fee is applicable. This is normally worked out as the lesser of the first instalment, but it may never exceed R6000. Consumers need not worry that these fees will be on top of their debt payment, as they are payable within the 60 days that payment to creditors is halted while the paperwork is finalised.

 

Once payment commences, the debt management agency will attach a 5% after-care fee. This percentage is worked out using the debt payment amount. After 24 months the 5% after-care fee is reduced to 3% until such time that all debts have been settled.

 

These are the only fees applicable to debt management. However if a consumer withdraws from the process, they will forfeit 75% of the fees already paid.

 

It is evident that a debt management agency is an affordable avenue for consumers who find themselves over-indebted.

 

Article written by: Andrea van Tonder 07-2013


Debt Management Agency - what does a debt management agency charge?

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