A debt counsellor who has accepted an application from a consumer seeking debt counselling must determine whether any of the consumer's credit agreements appear to be reckless, the National Credit Act says. If a debt counsellor reasonably concludes that you're overindebted and have been given credit recklessly, the act says the debt counsellor may recommend to the magistrate's court that certain credit agreements be declared reckless. Debt counsellor Deborah Solomon said debt counsellors had a duty to take such cases to court, because the courts have the power to set aside credit agreements that were granted recklessly, giving relief to consumers. However, there is a perverse incentive for debt counsellors to overlook cases of reckless lending, because of the way they're paid. Debt counsellors earn a monthly fee based on a percentage of the amount paid to your creditors, in terms of the repayment plan. So the more you are paying to your creditors, the bigger their fee — be it their ...

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