Since inception of Debt Counselling in the South African financial market in 2007, R2 billion has been paid over to credit providers through Debt Review. Debt Counselling provides individuals with an alternative t administration and sequestration. Essentially, it helps individuals avoid the stress of being blacklisted, losing assets and the burden of managing debt.
An unhealthy reliance on debt as a crutch may result in debt addiction. Borrowing usually occurs when plans outweigh available finances. There are healthy ways to do this, but there are also instances when individuals may become over-indebted. This is where debt counselling may be useful.
Through the process of debt counselling, debt counsellors investigate an individual’s financial lifestyle and assist in creating agreements that allow individuals to cover living expenses.
These counsellors make recommendations to credit providers and courts in restructuring individual debt circumstances. This process helps individuals determine if they are over-indebted. During this process, credit providers cannot attach assets. The process continues until all debt is paid and the process leaves no permanent record on the consumer credit bureau.
How does debt counselling work?
- You will be charged an application fee of about R50.
- A rejection fee of R300 is charged if you are found not to be over-indebted.
- If you are over-indebted however, you will be charged a restructuring fee of an estimated R6000 (excluding VAT) for creating a payment plan.
- Legal fees will amount to about R750.
The professional body associated with debt Counselling in South Africa is The Debt Counsellors Association of South Africa.
You can visit their website here: www.dcasa.co.za
It’s important to seek help as soon as you realise you are over-indebted. If you have multiple debt repayments to make and you are unable to keep track, there is help available. Your monthly debt obligations will be consolidated and you will be responsible for paying a single instalment every month until all your debts are settled.