What is debt counselling

Debt Counselling

Debt Counselling, also known as debt review was introduced to South Africa in order to support indebted consumers who can’t keep up with their debt payments. The National Credit Regulators regulate debt counsellors who have expert knowledge to help and guide consumers with debt problems and create plans which help consumers afford their monthly debt burdens.

The National Credit Act is legislated to protect consumers from audacious lending and over-indebtedness as well as to promote a fair and effective credit market. This is done through a debt review whereby a debt counsellor helps you control your monthly payments without the need to acquire new loans which gets you into more debt.

The debt counsellor will assist you with the redevelopment and lower payments according to what you can afford. If the debt counsellor foresees that you are unable to meet your monthly debt, they will propose a debt reconstruction plan to all your credit providers and make a proposal to the Magistrates Court to re-arrange your debt. Furthermore, if the debt counsellor determines that any of your credit agreements are unlawful, they will declare your credit agreement with that certain credit provider reckless and possibly close or renegotiate the agreement.

Debt Counselling can protect you against creditors wanting to take legal action against you or wanting to repossess your assets. The debt counsellor will negotiate with your creditors on your behalf on the repayment periods as well as reduce fees added on to the principal amount due to arrears or late payments.





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