Finding it a struggle to meet your monthly financial obligations? Are your bills more than
your income? It may be that you are over indebted. Consider debt counselling. In 2007, the
National Credit Act introduced debt counselling. In a nutshell, debt counselling is a legal
process that provides for a consumer to be declared over indebted. A Debt Counsellor can
and will negotiate a restructured payment plan, as well as obtain a court order that confirms
the new repayment plan. It is estimated that over 110 000 consumers are in debt
Debt counselling has been designed to help over-indebted consumers with an alternative to
the usual solutions for defaulting on debt: administration and sequestration. Both
administration and sequestration have their disadvantages. A person may apply to have his
debt placed under administration only if his total debt is less than R50 000. On top of that,
the administration charges are 12.5 percent of every instalment paid. Going into
sequestration means that a consumer will lose his assets. He will also need to get
permission from his court-appointed trustee if he wants to borrow money.
Debt counselling, on the other hand, means rehabilitation of the over-indebted consumer.
One of the biggest advantages, and attractions of the debt counselling process is that this
process is regulated. It is also designed to protect you from harassment from your creditors,
as well as the loss of your key assets. This is not at all like sequestration where you’ll need to
apply to a high court for a rehabilitation order. With debt counselling, you can be
rehabilitated as soon as the debt counselling process is over. And, you won’t have any
negative listing remaining on your credit record.
The answer to the question then, if whether you will benefit from debt counselling is yes. It
is an effective way to help you manage your excess debt. It allows you to keep to your debt
agreement with your creditors, while giving you a little breathing space to ensure that your
obligations are met. As with any process, it is advisable that you find out what your
responsibilities are, and what rights are afforded to you by the NCA.
Find out if debt counselling can benefit you. Speak to One Debt today for more information.