By Emsie Martin
It’s that time of the month again and you get anxious when an unfamiliar number appears on your phone. If you know you owe someone money, answer the phone and don’t make promises you can’t keep. If you don’t have enough money at the end of the month to meet all your obligations and usual expenses, it’s time to look at debt counselling.
Debt counselling offers a good solution for consumers smothered in debt through an effective debt revision plan. This process starts with the application and culminates in the issuing of an exemption certificate.
DebtSafe decided to question some of their debt-free clients about how they experienced the debt revision process. With the aid of this feedback, a debt management expert, Wikus Olivier, sheds light on what debt counsellors do and what debt counselling entails.
Myth: All debt counsellors are the same
Olivier states that each debt counsellor uses his own set of procedures, values and outlook when it comes to assisting consumers.
Olivier says although the debt counselling process is mainly regulated by the National Credit Regulator (NCR), each debt counselling firm is unique: Their core values, systems and approach to solving clients’ debt problems give each firm its own unique features.
Choose a debt counsellor that suits your own core values and with whom you can identify as an individual. Building a relationship is important, as you will have to communicate and work with a debt counsellor for a few years. This is why your choice in this regard is extremely important.
Myth: Nothing can be learnt from a debt revision process
A debt-free consumer’s own words confirm that clients do become knowledgeable: “What I learnt through the debt revision process, is that you should always try to save where you can. And you should never spend more than you earn.”
Olivier assures consumers that a lot is to be learnt during a debt revision process, for example how to manage your future finances.
Debt counselling can have a drastic effect on consumers, such as suddenly having to work on a budget, but the financial knowledge that is acquired is invaluable.
Myth: No more applications for credit?
Credit applications may not be refused as a result of your debt revision background. As soon as a debt exemption certificate has been issued, processed by the creditors as well as the bureaus, you can apply for home loans, vehicle financing and other credit applications, says Olivier.
Many consumers who have gone through the debt revision process have subsequently succeeded with credit applications.
When a credit provider turns down someone’s access to credit, the consumer has the right to receive a comprehensive explanation as to why the credit was denied, after which applicable measures or procedure can be followed.
Can you lose your assets?
According to the stipulations of the National Credit Act, debt revision protects your assets, says Olivier. The debt revision process is specifically designed so that consumers are enabled to pay back their debts, including home loans and vehicle finance, without losing their assets.
Debt counsellors’ tasks include the following:
- Breaking up debt into affordable instalments and giving clients the necessary cash flow every month.
- Handling and negotiating with creditors to keep them off the client’s back.
- Implementing a reasonable payment plan.
- Seeing to it that clients are removed from credit bureaus.
- Enabling clients to make provision for important living costs.
Debt counselling fees
All debt counselling fees are regulated by the National Credit Regulator (NCR). Debt counsellors cannot ask what they please.
Slowly but surely
To manage your debt is not the easiest or quickest process.
A debt-free client admits: “In the beginning it was difficult, but then it became easier.” With the assistance of a debt counsellor clients can breathe easier as an approved debt revision programme is implemented on their behalf. It enables consumers to pay off their debts every month in affordable instalments.