What is debt counselling ?
When exploring your options to overcome your debt you are likely to have come across the term debt counselling. Debt counselling first came to the attention of those who had unmanageable amounts of debt when the National Credit Act came into effect a few years back. In the early 2000’s credit could be applied for and received much too easily with credit providers being reckless. This resulted in South African consumers being drowned in debt that they could not repay and they were soon facing creditors threatening them with legal action. Consumers would also be easily blacklisted, making it difficult for them to get credit further down the line when they were in a stable position to apply for credit.
The price of living is always on the rise and for many debt is the only way they can survive and to live a comfortable lifestyle. Today it is estimated that around 10 million South Africans are struggling to repay their debt but these days consumers have an option that just a few years back they would not have had: debt counselling.
The role of the counsellor in the debt counselling process
Debt counselling involves allowing a registered debt counsellor to handle your finances on your behalf. It involves a number of things including providing financial advice regarding budgeting and responsible spending, restructuring monthly payments to make payments easier, negotiating with the credit providers on behalf of the person with debt to reduce monthly payments and to extend the payment period, and monitoring the payments that are being made. Debt counsellors can also handle your debt repayments by enabling you to pay them a standard amount each month while they separate the amount up between the various credit providers to whom you owe money.
While debt counselling is a fantastic choice for when you are looking to escape debt it is important to keep in mind that debt counselling is not for everyone and there will be people who will not qualify for debt counselling for one reason or another. The debt counsellor that is assigned to you by the credit counselling company you approach will be able to determine whether or not you need debt counselling. If they should decide that you don’t need counselling then it is likely that you will be declined debt counselling.
What does debt counselling cost ?
Debt counselling will involve a number of fees and it is important that you discuss the fees thoroughly with the company before you sign up for their services. Know what you are getting yourself into and make sure that you will be able to afford the payments that are involved. Once you have applied for debt counselling you will not have creditors asking you for money.
When you are accepted for debt counselling you will benefit a lot from the knowledge that you will be given by the debt counsellor who will work with you. The knowledge that you will be given will help you to get out of debt and to stay out of debt. This will help you to regain control over your life and over your finances.
When you are ready to take responsibility for the debt that you have, debt counselling is a fantastic way in which to clear your name and make a fresh financial start.
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