If you are having trouble paying your debts and are considering
debt administration, consider these tips.
- First approach your creditors to discuss alternative payment arrangements.
- Think carefully before applying to the courts for administration because it may well place you in a debt trap from which there is no escape. It is important that you retain a good credit record - debt administration should be used as a last resort.
- If you choose to have yourself placed under administration, ensure that you deal with an ethical and reputable administrator.
- Before using the services of an administrator, ask for a breakdown of all the charges, including the application fee that you will have to pay to the administrator. Some administrators charge a fee of between R600 and R1 800 upfront, as well as more than 12.5 percent, plus VAT, of everything that they distribute to your creditors on your behalf. Other fees include employer deduction fees of five percent of all payments deducted on behalf of the administrator.
- Ask the administrator how long it will take you to pay off your debts after the administrator's fees and costs have been deducted.
If you have already been placed under administration, consider these tips.
- Insist that your administrator provides you with a copy of the court order of you being placed under administration, as well as a list of your creditors that the debt administrator should be paying on your behalf. Carefully check that all your creditors have been listed and ensure that only valid creditors are included.
- If the administrator deducts a monthly amount from your pay slip, keep these pay slips as proof of how much is being deducted each month.
- Visit the administrator at least quarterly and ask for a statement that reflects all costs that have been deducted, as well as payments made to your creditors.
- Check with all your creditors that they have received payments from the administrator.
- Ensure that you get the best deal and that your administrator does not become your biggest creditor. If you are uncomfortable with the manner in which your administrator is dealing with your affairs, you can approach the courts for protection.
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