Changing to another debt counselor.

How To Change To A Different Debt Counselor

People in debt change to different debt counsellors for several reasons. How does one go about changing to another debt counsellor?  Do you need professional help with that? Find all of this and more in the article below.

Why Change To A Different Debt Counsellor?

There are positive and negative reasons why people decide to switch debt counsellors, all of which are understandable and valid.

Dissatisfaction With Current Counsellor

Some people feel that they and their chosen debt counsellors are unprofessional, lack transparency or integrity, lack communication, or communicate in different ways–they might feel uninformed, unheard, or ignored. Others may feel that their debt repayment plan is unachievable or unrealistic, or that the debt repayment plan is too slow.

Found A Better Debt Counsellor

Many debtors are in unique financial situations, so when they find a counsellor with expertise or experience congruent to their financial standing, they may decide to make the move to different counselling. These counsellors may offer better resources, like financial and legal guidance.

Another reason to switch is convenience: there may be a counsellor closer to where you live if you’ve moved, or with more affordable fees.

Steps To Change To Another Debt Counsellor

Changing debt counsellors is possible. But how do you choose one, what legislation is involved, and what happens after you change to another debt counsellor?

The Legal Process of Changing Debt Counsellors

It’s important to understand the legal rules of regulations for changing counsellors to ensure compliance, which greatly influences the timeline of changing debt counsellors.

Understand The National Credit Regulations Regarding Changing Debt Counsellors

If you would like to familiarise yourself with the relevant legislation to be referenced going forward, we recommend you have a copy of National Credit Act 34 of 2005 (governs debt review and the framework for changing debt counsellors) and Debt Review Regulations 2017 handy.

Notify Your Current and Future Debt Counsellor

Under Regulation 15(2) of the Debt Review Regulations, 2017, it’s your responsibility to notify both your current and future debt counsellor of your intention and reasons to change in a formal document, specifying contact details of both counsellors as set out in section 15 (2) of the 2017 Debt Review Regulations.

You are also bound by section 15 (3) of the 2017 regulations to share all necessary documents:

  • Debt review agreement
  • Financial statements
  • Creditor communication

Per 15 (3) of the 2017 regulations, you should also notify all creditors within seven days.

Can My Current Counsellor Refuse The Handover?

No. According to Regulation 15(3) of the Debt Review Regulations, 2017, your current counsellor has no choice but to cooperate.

What Does My Future Counsellor Have To Do?

There are some legal proceedings your new counsellor is subject to follow under section 15 (4) of the 2017 regulations.

Transfer request to NDMA

They should request the transfer of your file in writing from the NDMA (National Debt Mediation Association.)

Review Debt Payment Agreement

Your future counsellor should take a look at your debt review agreement. They can also suggest changes, so long as it’s consensual on your part.

Notify Creditors

The creditors should be aware of the switch within 7 days. They should also ensure prompt communication with your current counsellor.

The National Debt Mediation Association Processes Your Transfer Request

By the terms of 2017’s Regulation 15 (5), the NDMA approves, tracks, stores, and processes all debt counsellor change and transfer requests.  It’s also their responsibility to inform you, creditors, and both counsellors of their decision.

Go Forward With The Transfer Ensuring Compliance

It’s also your responsibility to keep all creditors and counsellors in the loop with current, past, and future monetary happenings by providing accurate information and statements, as well as changes in your personal finances or contact details.

Regulation 15(6) of the Debt Review Regulations 2017 strongly emphasizes that the transfer should not cause any interruption in the debt review process. Your payment plan will continue as per any revisions or as normal.

Legal Risks of Non-Compliance

Non-compliance can lead to legal consequences, including delays, financial penalties, or even invalidity of the debt review agreement. Do not falsify documents or stop communicating with your counsellor, as this can also cause serious legal disputes.

How to change debt counselors.

Cape Town Legal Consultants: Here To Help

If all of this seems overwhelming, have no fear. Our friendly Cape Town Legal Consultants are here to help. Contact us here for help with your financial legalities and disputes.