Debt counselling is a necessary process for anyone who faces increasing amounts of debt, without the means to pay it back timeously. A debt counsellor takes charge of all legal procedures, communication and payment schedules. Such a counsellor has the necessary skills and qualifications to guide clients throughout a debt review process.
Popular Debt Counselling Services Include:
Assisting clients to be declared under debt review
South Africa started offering debt review processes in 2007 when the National Credit Regulator (NCR) offered this as an alternative to being sequestrated. Since that time many people have opted for this process after accumulating too much debt. In order to follow this process, a client must first apply for and be declared as ‘under debt review’. Debt counselling services include this application service to the courts.
Communication with creditors
Throughout the debt counselling process, communication with creditors is required. South African laws give creditors the right to object and ask for different terms if necessary. Creditors need to be informed of the process and payment schedules must be discussed. Debt counselling handles this process on behalf of the client.
Structuring a repayment plan
When you’re in a debt counselling process, the debt counsellor gathers all information in terms of income, expenses and debt. The counsellor is skilled at determining the best payment plan, while enabling the client to still manage daily expenses.
Devising a new personal budget
South Africans live in a challenging economy, with spiking food and fuel prices. Part of debt counselling consists of helping clients prepare a new budget for personal use. Debt counsellors have knowledge about how to approach daily expenses in a wise manner.
5 Tips when Hiring Debt Counsellors
1. Prepare yourself for a different lifestyle
You need to realise that debt counselling will propel you into a different way of life. The regulations of debt counselling demand that no more debt is made in your name. You will also have less money to spend monthly, since your income will be used to pay off your debt. Accept this before you start. A positive attitude—rather than resisting the inevitable—will make the process more bearable.
2. Confirm the counsellor’s certification
Debt counsellors need to be certified by the NCR. Ask for your debt counsellor’s registration number, so you know your process is being handled within legal requirements.
3. Confirm expenses and compare quotes
Debt counsellors do ask fees for their services. Ask for a list of relevant fees from different debt counsellors. This will give you clarity on the process so you don’t receive unplanned bills in future. You can compare the quotes and pick the most acceptable one.
4. What do other people say about the service?
You want a debt counsellor who offers quality and friendly service. This will make the process easier and more successful. Read reviews or ask for references, so you know you trust the correct person with your financial future.
5. Trust your counsellor
At some stage you need to place your financial situation into a debt counsellor’s hands and trust him or her. If you try to fix the situation yourself, it may only get worse. Trust a skilled and knowledgeable professional, so you can reach a more acceptable financial position as soon as possible.