Is Debt Counselling For Me?
South African consumers often become over-indebted and find it hard to pay back their debt on top of their daily expenses and other financial commitments. We know how hard it can be to make ends meet and some months it may be impossible. Consumers then have to cut back fast and often important saving funds for their future take the brunt.
Alternatively they try to get a debt consolidation loan to easy the pressure but can find that they do not qualify for such a loan. One of the requirements for a debt consolidation loan is a good credit record. The other option is a short-term loan to afford their current debt, which can easily lead to the so-called debt spiral: Making more debt to pay off debt and paying increased interest rates in the process.
Debt counselling provides the necessary relief without adding to a client’s financial burden in the future or subtracting from important funds for retirement or their children’s future. A debt counselor goes over your specific financial situation to see if you are over-indebted and if this is the case, you have the law on your side.
Debt counselling puts the National Credit Act into play. When your debt counselor notifies your creditors that you are under debt review, they take over and negotiate an affordable debt repayment plan to suit your needs. Debt counselling provides legal protection from creditors and debt collectors. The debt counselor’s fees will depend on your affordability, meaning you pay what you can afford, and this is built into your new repayment plan.
Debt review can be seen as debt consolidation without having to take on a new loan, as you will only pay a single payment per month, which is then distributed to your creditors by a trusted payment distribution agency. Your debt counselor does not touch your money. They give you the help you need to make your debt affordable by restructuring it around your living expenses.
Debt counselling is an accessible and easy way for all over-indebted South Africans to get the help of a financial and legal expert. It is best to apply for a free financial assessment as soon as you suspect you cannot afford your debt on top of your other expenses. This gives your debt counselor the chance to include as many credit repayments in the restructuring process as possible. We want to give you a completely optimized financial plan to see you into a debt-free future.