By Emsie Martin
Even if Covid is ‘officially’ almost something of the past, people are still struggling with financial problems caused by the pandemic. They fear those daily/monthly phone calls from creditors. If there isn’t enough money at the end of the month to meet all your obligations and normal expenses, it’s time to take a look at debt counselling.
Debt counselling offers a good solution to consumers who are bogged down by debt, with an effective debt review plan. This process stretches from the application process to the issuing of an exemption certificate. Although this process has helped many consumers get out of debt, some still believe various myths about debt counselling.
DebtSafe decided to question a few of its many debt-free clients about their own experiences with regard to the debt review process. With the aid of this feedback, a debt manager expert, Carla Oberholzer, sheds light on what debt counsellors do and what debt counselling entails.
Oberholzer states that every debt counsellor makes use of his own set of procedures, values and outlook when it comes to assisting consumers.
Although the debt counselling process is regulated largely by the National Credit Regulator, every debt counselling company is unique regarding the following:
- The way in which clients are handled and how they position themselves in the market.
- However, it is the ‘behind the scenes’ processes and systems that distinguish each debt counselling company.
- Basically, it is the way in which each company adds value for every client and how statutory and procedural requirements are met, that make them different.
- The core values of the companies, their systems and approach to debt problem-solving of clients give each company unique features.
Choose a debt counsellor that fits your own core values and with whom you can identify as individual, because you will have to communicate with a debt counsellor for a few years. This is why your choice is extremely important.
Learn from the debt revision process
A debt-free consumer confirmed in his own words that clients do indeed become knowledgeable: “What I learned through the debt revision process is that you should always try and save where you can. And you should never spend more than you earn.”
Oberholzer assures consumer that there is a lot to learn during a debt revision process, for example managing future finances and to suddenly have to work on a budget, but the financial knowledge that is acquired is of inestimable value.
Debt counsellors work together with clients
Debt counsellors work with the client to make sure the latter receives their exemption certificate (form 19 in terms of the National Credit Act) at the end of the debt revision process. Debt counsellors’ relevant tasks include the following:
- Debt is divided into affordable instalments that give clients the necessary cash flow each month,
- Handle and negotiate with creditors to keep them of the client’s back,
- Implement an equitable payment plan,
- See to it that clients are removed from the credit bureaux’s register and
- Enable clients to make provision for important living costs.
Debt counselling fees
Firstly, all debt counselling fees are regulated by the National Credit Regulator (NCR). Debt counsellors cannot simply ask what they like.
Most debt counsellors are ‘consumer champions’. The amount of work that needs to be done in order to send a consumer on his/her debt-free journey is impressive.
No credit in future?
Credit application cannot be refused due to your debt revision background. As soon as a debt exemption certificate that has been processed by the creditors as well as the bureaux, is issued, you can apply for home loans, vehicle financing and other credit-related applications, says Oberholzer.
Debt revision, as solution to excess debt, has a rehabilitating spirit. The entire aim is to get the consumer credit-active once again, of course in a responsible way. Many consumers who have gone through the debt revision process apply for credit with great success.
Should a creditor turn down someone’s access to credit, the consumer is entitled to receive a full explanation as to why the credit was turned down. From there on the applicable measures or procedures can be applied.
Can you lose your assets?
Due to the National Credit Act’s stipulation, debt revision protects your assets, says Oberholzer. The debt revision process is specifically designed so that consumers can pay back their debt, including home loans and vehicle financing, without losing their assets.
As soon as the debt revision process is entered into, all creditors are forbidden from taking further steps against consumers regarding the accounts included in the process. The creditors may not, for example, repossess your car while you fall under a debt revision programme. The only way in which creditors will be allowed to repossess your car, is if you sign a letter in which basically you return the vehicle voluntarily, or if a valid court order is provided by the high court. This is the only way in which assets can be taken from you.
In easily, out easily
To manage your debt is not the easiest or fastest process.
A debt-free client confesses: “In the beginning it was difficult, but later it became easier.” To manage debt is not so easy as one-two-three, but with the assistance of a debt counsellor clients can breathe again because an approved debt revision programme is implemented on their behalf. This enables consumers to settle their debt with affordable instalments each month. Clients should therefore hang in there in the short term to be debt-free in the long term.
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Carla Oberholzer by DebtSafe email@example.com
Also read: https://www.prokureur.co.za/faq/Skuldinvordering.html