Is Debt Counselling for Me?

Debt counselling, or, as it is also known, debt review, is a legal process designed to assist
those who are over indebted. For consumers to get out of debt, they need to take decisive
action. This is where debt counselling can help. It is also important to note that this process
is for those who are struggling to pay off their debts and not those who are simply living
beyond their means.

What is it about?

Debt counselling was introduced in 2007 by the National Credit Act. It aims to assist over
indebted consumers who are struggling to pay off their loans, credit card payments and
other debt. It is a formal process that allows over indebted consumers to enter a structured
debt repayment process with their creditors. An over indebted consumer can apply for debt
counselling through a registered debt counsellor. He will speak with the consumer’s
creditors in order develop an affordable repayment plan to help the consumer manage his
debt.

How can a debt counsellor assist you with your financial situation?

The first step would be to make an appointment with a registered counsellor. He will discuss
your finances with you. It is essential that you are completely honest and transparent about
your finances. This is so that the counsellor can draw up a realistic payment plan that
includes sufficient money for day to day living expenses and possible unforeseen expenses.

Once you have been declared over indebted and the debt counsellor has informed the
credit bureau and your creditors, he will assist by:

  • He will draw up a realistic monthly budget in consultation with you
  • He’ll prepare a debt restructuring proposal that includes the reduced monthly
    repayment amounts
  • He will ensure the payment of the affordable repayment amount
  • He will negotiate with your creditors on your behalf
  • You will then receive legal protection from your creditors that prevents your assets
    from being seized

Debt can be managed responsibly. With the assistance of a registered debt counsellor, you
will be able to repay the debt you owe. You’ll also have the benefit of learning how to draw
up a realistic budget to assist you with living within your means.

If you are wondering whether debt counselling is for you, speak to One Debt today for
guidance.

Posted in Debt