What is a Debt Counselor?
A debt counselor assists people who have taken on too much debt. You are over-indebted if your living and your debt-servicing expenses together, are higher than your income.
Debt counselors have to be trained by and registered with the NCR, before they’re allowed to provide debt counseling services.
If you are over-indebted, a debt counselor can give you advice and assistance to draw up a budget. He will help you to identify the things you spend money on that you don’t really need and you will have to give them up and adjust your lifestyle accordingly.
Your debt counselor will also negotiate with your creditors and try to reach amicable agreements, that will allow you to pay your debts and still have enough money to survive each month.
His aim will be to work out a repayment plan for you. He will propose smaller installments, over a longer period or time, or postponed repayments, to your creditors. If they don’t agree to the plan, he also has some legal means at his disposal, to force them to accept it.
Your debt counselor will also investigate if your creditors complied with the regulations of the National Credit Act, by doing the necessary checks, when they granted you credit. If they did not, they could be charged with reckless lending and your debt might even be scrapped.
Should I consult a Debt Counselor?
The main disadvantages of consulting a debt counselor are:
- It costs money. You’ll have to pay your debt counselor, as well as your creditors.
- While you are under “debt-review”, you will not be able to make any more debt, until you’ve completed paying off all your debts according to your debt repayment plan.
You should consult a debt counselor only as a last resort.
You should first try to lower your living expenses, by cutting out the things you spend money on that you don’t really need. You will have to do this, whether you consult a debt counselor or not.
You should also approach your creditors yourself and try to negotiate with them directly.
If you still find yourself missing loan-payments after doing all of this, it is time to consult a debt counselor.
How can I find a Debt Counselor?
You can contact the NCR by email at info@ncr.org.za, or phone them on 0860 627 627, to get referrals for accredited debt counselors.
You can also search for a debt counselor on the Internet. However, remember to make sure that the counselor you choose is trained by and registered with the NCR.
