I am under debt review with this other DC since October 2013, but surprisingly my debt has not decreased with my creditors and I pay all my monthly installment since October 2013. Is this because of the higher interest?
Secondly, I started debt review paying R5500 monthly but it increases each year, I now pay R6655 and when I am looking at the projections; it states that I’ll be paying over R10500 December 2019, is this increase normal for all debts reviews?
Lastly, my January debit order didn’t go through because my car insurer deducted twice the normal premium. Is it possible to catch up in the following months or am I in trouble?
I tried to email my DC but I didn’t get response in time, I am now panicking. That’s the reason I am looking for answers somewhere else.
Thanks for your question.
Annual reviews forms part of debt review best practices, but is not enforceable by law. Most debt counsellors do work a 5% or 10% increase into the repayment plan in order to get the consumer out of debt quicker. If interest rates are high, things might go slow in the beginning, but as the capital is reduced gradually, the interest applicable will also reduce gradually and the reduction of the debt will be accelerated toward being settled.
If you apply annual increases it accelerates the process even further. If you cannot however afford the increase, you need to communicate this with your debt counsellor ASAP. They are under no obligation to apply an increase, and they can keep it the same for you.
With regards to the missed payment: You should attempt everything to get hold of your debt counsellor and have them implement a new payment plan. You will have to catch up the arrears, simply because missing a payment gives the credit providers the right to terminate your debt review immediately. At least you can explain the situation and will be able to motivate with your debt counsellor. They will be able to make arrangements with your credit providers.