What is debt counselling?

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:

Debt Review Solutions

National Credit Restructuring

DebtCredit.co.za

Debt Counsellors Cape Town

Six ways to stay out of debt in 2013

We tend to focus on getting out of debt, but preventing a debt disaster is much less stressful and much more valuable in the long run.

With one in five South Africans having impaired credit records it has to point to a number of factors for people becoming over-committed financially. Fin24.com rounded up some main tips to avoid being a part of this statistic. We’ve expanded on them in an effort to make your life easier and 2013 the year you start and keep a debt free life.

After you’ve signed up for debt management advice it’s also a good idea to follow these tips to stay within your budget.

1) Your lifestyle should rely on your salary only

Don’t live above your means. If you get a bonus save most of it and enjoy some of it.

2) Spend money you have, not the credit available to you

Don’t think of credit facilities as an easy solution. It should be a last resort, but it is all too often used as a convenient way to afford the things we desire but not really need. Avoid store accounts and opt for loyalty cards instead.

3) Increase your debt repayments in line with your salary increase

This way you free up your income faster and you can use the money towards saving instead.

4) Focus on family activities instead of going to the mall

Malls are great temptations for children where parents give in all too often. Parents also spend more when they take their children to the grocery store. So if you want to stick to your grocery list and avoid tantrums, don’t take kids shopping.

5) Avoid temptation and resist ‘sale’ signs – ask yourself whether you really need it

Avoiding malls and sticking to stand-alone stores can go a long way in avoiding this temptation as you won’t have the urged to check out every sale.

6) Budget for the next year’s expenses.

Draw up a budget for all the expenses you already know you’ll have in 2013. Children’s school fees and other monthly payments might be significantly reduced if you can pay an annual premium. This also takes some stress of your shoulders for the rest of the year.

What are your expectations for this year? Are there any other tips you would like us to add? We want to hear from you.

Before you apply for a personal loan...

It’s that time of year where our finances can easily go downhill. A quick personal loan can be a great relief if ends just won’t meet after your holiday, Christmas and entertaining the family. Of course it is better not to over spend in the first place, but it happens.

Shop around before deciding on a loan. Fast personal loans like payday loans are expensive because credit providers charge high interest rates and admin fees. Banks’ personal loans are standardized, but it’s still worth looking into the different kinds of loans.

Some consumers opt for consolidation loans to make their debt more manageable instead of getting a loan to afford their living expenses. This is a very good idea. When consolidating your debt you can make your debt more affordable by applying for a secured loan with the lowest possible interest rates.

When you consolidate your credit you only have one repayment per month which makes it easier to avoid debt collectors as you will only have one loan to repay and keep track of. The new loan’s repayments can be less than the combination of your current small loans, credit cards, store accounts and other credit facilities.

This sounds like great news, but only if you can qualify for a secured loan. If you are already overcommitted or if you have a bad credit record you won’t be able to get a consolidation loan and save this way. You can apply to have your debt restructured, however, and get the same benefits as you would have enjoyed with a consolidation loan.

This easy alternative to personal loans or consolidation loans makes it possible, even for blacklisted people, to make your debt affordable and to only have a single repayment each month. A credit counsellor reviews your debt repayments and negotiates a new, affordable payment structure with your creditors.

Debt restructuring is the most affordable form of debt management in South Africa as your debt counsellor’s fee will depend entirely on your affordability. 9 out of 10 South Africans who opted for debt restructuring experienced debt relief and were glad that they opted for the help of a credit counsellor instead of another personal loan.

What to do with debt: Three ways to be on-top of your finances again

Stick to a budget 

It’s really not a good feeling when you realize that your debt is spiralling out of control. For most people it’s hard to cut back on living expenses, but it’s still important to stick to a budget until your debt is under control again. Think of it as a debt diet: you want to learn how to live within your means so you can stay on-top of your debt.

Why not get the help of a debt counsellor? They can work out a budget and help you to stick to it. It’s also perfect for that debt diet as you cannot get loans while under debt review.

Consolidate your debt

 

You can make your debt more affordable by consolidating your credit with a debt consolidation loan. A debt consolidation loan should have lower interest rates and the repayments can also cost less than you are currently paying towards your debt every month.

When you take on a secured loan to pay back small loans, credit cards, store cards and other debts you can save on interest rates and a single debt repayment is much more manageable than numerous debts.

Get your debt restructured 

If you cannot cut back on your living expenses and you don’t qualify for a secured loan to get the full benefits of debt consolidation, you can apply to have your debt restructured.

Debt restructuring is summed up in these five steps to pay off your debt, only two of which you will have to see to:

1) Contacting a debt counsellor and providing them with your financial information so they can prove to your creditors that you are over committed and

5) paying the now affordable, restructured debt repayment every month. 

What do you think will work best for you? We’ll be happy to answer any of your questions in the comments below.

Don’t be an over-spender these holidays

Shocking statistics predict that South Africans will pick up an average of 2kgs in body weight this festive season. Heartburn medication sales are at their highest this time of year as well. Other studies show that a big portion of consumers spend more on food during the holiday season than the entire year!

Are South Africans living in excess without regard for their health and financial security? It very well may be the case. We have the idea that the holiday season can only be celebrated if there’s an abundance and even an excess of everything that makes us feel good momentarily. Food and gifts are at the top of the list during the holiday season. 

I’m the last person to shy away from a good meal or a holiday trip, but I think it’s time that we take a look at our over-spending and over-eating. There are ways to enjoy yourself this holiday season without setting yourself up for financial ruin early next year. 

We live in a country where there is a great inequality between classes and it would be great if, instead of gorging ourselves for days and finding all kinds of ways to spend money this holiday season, we give back to the community, support and animal charity or at least curb our spending so we don’t have to make new debt at the end of December or January. 

Over-eating and frivolous spending is a big part of holiday culture around the world. We may have forgotten how to enjoy ourselves without it. Start by finding what it is you enjoy or why you’re not enjoying the simple things in life. Read 12 Common Causes and Proven Cures for Unhappiness by the motivational geniuses at Marc and Angel Hack Life. 

You might not be able to change the face of holidays, but you can make all the difference in your own life and the people closest to you. Remember that this is the time of year when businesses depend on people spending more than they can and soon the quick loan companies are smiling and consumers are the ones with the regrets. 

If you can afford to, it might be just the break you deserve to take your family to Sun City or a weekend getaway, but keep in mind that it’s usually the small expenses that amount to big problems and not the planned expenses. Looking at ways to make transport, dining and entertainment more affordable for the holiday you are planning can make all the difference to your budget.

Decorating on a budget

Cape Town: Debt Help Right to Your Door

I'm so excited about a new site I designed (well, kind of, I used a template) for Debt Counsellors Cape Town. I think it looks really clean and modern! Don't hesitate to click through for debt counsellors in Cape Town.

Get Your Money Back

Some marketers will sell you something by making you believe you really need and want their product. While I admire their skill, I hate the sinking feeling when I walk away and realized I just spent way more than I wanted to on something I don’t truly need and didn't even want before they go hold of me.

Most of the time I’m good at deflecting their advances, but in times when I've given in and somehow signed up for something I no longer want, I've found ways to backtrack. It’s not always possible and the best answer would be not to let yourself be convinced that they are selling you the greater good.

Getting your money back can be tricky, but I’ll break it down for you. I also look at returns and I take a no-nonsense approach when it comes to taking back goods that aren't working properly. You can save quite a bit by simply doing these things:

Keep record

If you've signed up for something by debit order, keep a record of the marketer’s number. If it was a policy you signed up for, keep your policy number. If it’s something you bought, keep the slips and keep the tags on. Even if they are really difficult about refunds, most places are fine with exchanges if the goods are undamaged and you have your proof of payment.

You didn't know you need tubular ice creams until now

It’s a good idea to keep your proof of payment whenever you are buying something electronic or worth more than R100. I’m not shy to take something back when it didn't perform the way I wanted or something broke. I even returned my birthday present from my mom. The hairdryer looked fine encased in plastic with its nifty attachments, but after taking it out of the packaging one attachment came apart. I could also tell that the hairdryer itself was flimsy.

I took it back the next day and got a different model. I had to pay more, but it’s more important to have something that lasts if you’re going to use it every day.

Keeping record of all the beneficiaries of your monthly debit orders is smart. Sometimes small payments accumulate and you cannot just cancel them because you’re not even sure where they are going.

Go back in time

No, not time travel, although that would be useful. Remind yourself to get back to cancel a subscription before the first debit order is cleared, to see if you can get a refund on the expensive foundation within the time of the store’s exchange policy or to return goods you are unhappy with before the guarantee expires.
If you've booked holiday accommodation and you find it cheaper somewhere else you can usually cancel your booking if it is done in time. Find out what their policy is. Waiting too long can cost you in the form of losing your deposit and not booking when you think you've found the best deal can mean disappointment.

Be firm

I've also found that some places ask you a lot of questions when you try and cancel a subscription. One offered me a reduced monthly payment, but the initial sign-up was still very expensive. If you’re like me and find it hard to be firm with strangers, give it a try. It really works and I even felt good about my new-found assertiveness.

I hope you can get your money back next time something goes wrong with a purchase or you have changed your mind. If you’re out of ideas of how to save money and just want to make ends meet for a change, read my post on Applications for debt review and to consolidate your debt.

Attract a debt free life

We’re approaching something a bit more philosophical in this post and people who believe in the laws of attraction will catch on to where I’m getting at. If this is all too airy fairy for you, read on. Maybe you feel like giving something new a try. The advice is free and harnessing your personal energy has helped many other people, so you might as well give it a shot!

The basis of the law of attraction is the belief that your mind can control your destiny beyond the obvious decisions we make. Scientists have seen the mind change the structure of atoms in water, so the notion that we have energy coming from us is more than just a hippy idea. If you've ever felt depressed, anxious or comforted in a stranger’s presence for no reason then you've experienced something of this energy.

If we can influence matter and each other, then why not try and influence yourself and your life? It’s just a matter of using your thoughts in a constructive way. There’s nothing new to do here, the trick is just to focus on thinking things that will nurture you and contribute to living the best possible life instead of longing for a life you cannot have. 

When you are wishing for something, you are saying you don’t have it and these thoughts attract more energy into your life that will match your energy where you don’t have what you want. If you can use your mind to visualize what you want and use your imagination to experience this in detail, the energy you are sending out is having what you want and soon enough you will have what you desire.

Let’s take debt as a practical example. Your goal is to live debt free. But is having a goal enough? You might be doing all the things you think you should be doing to gear yourself towards financial freedom, but things are still not working for you. Actions are still very important if you’re going to rely on attracting what you want, because when we act we are also using our energy towards something. So there must be something missing if you’re still falling short of living your dreams.

Erin Pavlina's view on harnessing your mind’s ability to attract the things you want also stresses the importance of your actions being in line with your desires. Check out her post How to Become a Vibrational Match for your Desire. She explains the relation between your desires, your actions and your mind perfectly in the section Jump on Opportunities.

An interesting facet of attracting what you want according to Pavlina is making sure you really want what you are dreaming of. It’s worth doing some self-evaluation to determine if there is a reason why you aren't changing your thoughts and actions to accommodate the direction you want your life to take.

Is there some kind of pay-off to being over indebted? Having things you cannot afford, avoiding other issues in your life by worrying about your finances, nurturing the belief that you will never be good with money and many more factors can be keeping you from saving or paying back your debt.

If you’re sure this is not the case, let yourself daydream about your life after debt. Feel how it feels to live a better life with abundant wealth. Experience it and use the power of your imagination to make yourself open to receiving new things by creating space for them in your mind. If you can really dream it without second-guessing or yearning for it, you can live that dream. 

Pavlina calls it getting your shopping cart ready for everything you are asking for from the universe. It’s good to want new things and act to get them, but if you’re not ready to receive them the universe will hold onto your goods until you are ready.

If you take just one thing from this, remember to keep dreaming and feeling yourself living the life you want. Let go of longing for what you cannot have and work on being a match for what you desire. According to the law of attraction, yearning only attracts more yearning and negativity more negativity. Use your imagination to be positive and active in attracting what you want.