Why should I use Debt Counselling?

This article was posted on 12 August 2016

Posted in Debt Counselling


Debbt

Are you having sleepless nights because you’re drowning in SO MUCH DEBT that it feels as if you will never make it to the surface of financial freedom? Debt Counselling is your lifesaver.

Due to these tough financial times that we live in, we often find that the amount of our monthly expenditure surpasses that of our net income and in order to get by we need to make the necessary arrangements for the sake of our families.  These arrangements are not always financially balanced and before we know it we are in more debt than what we can afford and in worst case scenarios, become blacklisted.

What is Debt Counselling?

Debt Counselling will assist you in dealing with your debt by means of professional debt counsellors who will act on your behalf and liaise with Credit Providers as well as courts and mediate the terms on how you will repay your debt.

How does Debt Counselling work?

Before you can qualify for Debt Counselling you need to provide debt counsellors with the information of all your Credit Providers and they will determine if your monthly expenses have advantage over your monthly income – this is called a Debt Review. It is very important to know that you will only qualify for Debt Counselling if you are over-indebted.

Once the debt counsellors can confirm that you are over-indebted they will make contact with your Credit Providers and Credit Bureaus to notify them that they are now regulating how you will repay your debt. Your Credit Providers will, in return, have to provide them with a Certificate of Balance (COB) so that they can work out how you will settle your debt.

After receiving and reviewing all the mentioned documents the debt counsellors will draw up a contract that is both convenient for you as well as the credit provider. A Clearance Certificate will be issued to you once all your debt has been settled.

How much does debt counselling cost?

The National Credit Regulator determines that you can expect to pay anything between R50 and R300, upfront and in order to monitor your progress there is also a small monthly fee, from the first month, of 5% off your monthly repayments for the first 24 months (and 3% thereafter).

Because the Debt Review has to go to court you will also have some legal fees to pay. This is included in and will be deducted from your second month’s instalment.

Benefits of debt counselling

Besides obtaining financial freedom, which that is very demanding to maintain in the current economic climate, you will also be able to have your name cleared off all blacklists as well as having your credit record restored.

 

- Enzo Leigh Botes


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