Many South Africans can benefit from debt
counselling without knowing it. As part of the Consumer Protection Act in South Africa, debt counselling is a very
effective and affordable way to protect your assets and to recover your
financial situation when you are in a tight spot.
The debt counselling process is made simple
for consumers: You apply online and a debt counsellor assesses your financial
situation. If you are declared over committed the debt counsellor will send
your creditors a letter informing them that they have to contact your debt
counsellor with any queries from there on out because you are under debt
review.
You are then protected from your creditors
and debt collectors. Your debt counsellor will approach your credit providers
within the next few days to discuss your current repayment structure. They will
prove to your creditors that you cannot afford your debt and that you need your
debt restructured around your living expenses (which you provide the debt
counsellor).
Debt counselling makes your repayments
affordable so you can breathe easily knowing that you’re able to pay back your
debt. Your debt counsellor can also negotiate lowered interest rates and
penalty fees if you have any. Debt review is affordable because your debt
counsellor’s fees will depend on your affordability and this will be included in
your single repayment to a Payment Distribution Agency every month.
Debt counselling can be an option for you
if you are thinking of consolidating your debt into a single repayment but you
have a bad credit record and cannot qualify for loans for consolidating debt.
Poor credit scorers have a hard time getting debt consolidation loans with
affordable interest rates. With debt counselling your debt will be consolidated
into one repayment even if you have a poor
credit record.
Some South
Africans look for credit consolidation when they have bad credit by
reaching for short term online loans
or blacklisted
personal loans but these have very high interest rates and they’re not
worth the trouble of consolidating.
If you’re tempted to take on a loan to pay
back existing repayments or to afford basic living expenses like food or your
children’s school fees you may be over indebted and debt counselling can be the
perfect way of gaining control of your finances again. Apply sooner for debt
review rather than later. Once you have received a Section 129 letter from a
creditor that debt cannot be included in your debt review.
Debt Counsellors in South Africa:
