With the number of South African citizens who are over-indebted climbing above 10 million, there’s never been a more apt time to talk about debt counselling. The National Credit Act has provided this process to tackle this problem of debt and hopefully relieve some of the pressure that it puts on everyday citizens in our country.
The debt counselling process is intended to help over-indebted people who are struggling with debt by providing budgeting advice, negotiating with credit providers on your behalf for reduced monthly payments, as well as restructuring your debts.
How Does Debt Counselling Work?
If you’re struggling to make your monthly debt repayments, you can apply for debt counselling with a registered debt counselling company like National Debt Counsellors.
The process of debt counselling is much simpler than you might expect. It is summarised in a few easy steps:
Step 1: Request a Free Consultation from National Debt Counsellors
One of our professional consultants at National Debt Counsellors contacts you and takes you through a free, no-obligation financial assessment to determine whether you’re over-indebted. Don’t worry, this process is completely confidential!
Step 2: We Notify Your Creditors & Negotiate a New Payment Plan for You
If you are indeed over-indebted, we then notify your creditors that you’ve applied to go under debt review. From here, you and your assets are immediately protected under the National Credit Act. We also negotiate your loan agreements with your credit providers and restructure your repayments to an amount that’s affordable for you. This means you’ll no longer struggle to make payments each month!
Step 3: Pay a Single, Affordable Monthly Instalment
Once we’ve handled the above steps for you, you begin paying one easy monthly instalment via an accredited PDA (Payment Distribution Agency), which distributes the funds to your credit providers.
Step 4: We Make the Approved Plan an Order of the Court
Our panel of Attorneys apply to the Magistrates Court on your behalf to make your restructured repayment plan an official order of the court and ensure you remain protected during the process.
Step 5: Your Debt is Paid Off and Your Credit Record is Clear!
Slowly but surely, you’ll pay off your debt. Hooray! Once it’s repaid, we issue you a clearance certificate and notify the credit bureaus to clear your credit record. You are now able to live in financial freedom!
The Advantages of Debt Counselling with National Debt Counsellors
The debt counselling process has a lot of benefits, the most significant is that you’re able to repay your debt in a structured and sustainable way. We will assess your budget, consider essential expenditures such as groceries, housing, education, and transport, and then work out how much you can afford to pay going forward.
Here are some of the other main reasons you should consider working with us to help clear your debt:
No More High Amounts
Your monthly repayments are reduced to an amount you can afford, which helps you slowly but surely step out of debt and into financial freedom.
We Cover You (and your goods)
We provide immediate protection to you and your assets, including your house and car.
We’re the Ultimate Middleman
We negotiate with your credit providers directly, so you don’t receive any more harassing phone calls.
More Peace, Less Stress
We negotiate lower interest rates on your behalf, and we extend your repayment terms. This means you get a bit more breathing room as you begin moving towards more financial stability.
We’re Comprehensive from Start to Finish
Once you’ve cleared your debt, we apply to clear your credit report. So, all you must do throughout the process is make your payments. We do everything else on your behalf!
The ultimate reason to undergo debt counselling is simply to get on a better financial wicket overall. To live debt-free is the goal, and with debt counselling it becomes possible.
How Long Should I Receive Debt Counselling For?
This varies according to how quickly you can pay off all your debts. It can last for just a few months, or up to 60 months. Alternatively, if you’re no longer over-indebted and can resume normal repayments.
It’s important to note that debt counselling is not the same as blacklisting. Any record of you being under debt counselling is removed from your credit record once you’ve completed the process successfully.
What Are the Costs Involved?
The National Credit Regulator (NCR) issues fee guidelines for debt counsellors that include an application and administration fee of R350 plus VAT, a restructuring fee equal to the first month’s instalment up to a maximum of R8,000 plus VAT (maximum of R 9,000 for joint applications married in community of property), and a reckless lending fee of R 1500.00 plus VAT.
There is a monthly maintenance fee of 5% of the instalment up to a maximum of R450 plus VAT. These fees are included in your monthly instalments.
There is also a legal fee payable to the attorneys for obtaining a court order to ensure you are protected from your credit providers. We will provide details of this in your application.
Will I Get a Loan After I’ve Paid My Debt?
Once you’ve successfully paid off your debt in full and received your clearance certificate, you can, indeed, apply for a loan. It’s important to remember undergoing debt counselling isn’t a life sentence.
It’s also important to note, however, that you’ll need to start building up your credit score again before doing so. The reason for this is that once you complete the debt review, you get a clean credit slate.
Why Choose National Debt Counsellors?
We’re a team of leading debt counsellors who believe that debt doesn’t mean disaster. We assist everyday South Africans who find themselves struggling to meet their monthly financial obligations. Our team of Debt Counsellors are registered with the National Credit Regulator and offers you a free, no-obligation assessment of your financial situation.
If you commit to this process properly, your life can change. If you’re struggling to manage your debt, take that first step towards financial freedom and contact us today. Don’t put it off, because your financial freedom is waiting!
