Debt Counselling Facts

There are a lot of misconceptions and perceptions regarding Debt Counselling in the market place. Some of them are true and some of them purely there to intimidate the consumer not to apply for Debt Counselling. We would like to give the facts as plain and simple to you as consumer in order to empower you to make the best decision based on your actual situation.

Consumer Choices

The consumer basically has 3 choices when becoming over indebted:

  • Do Nothing
  • Approach the bank for assistance
  • Apply for debt counselling

What are the implications of the 3 choices?

Do Nothing

Doing nothing will just result in the credit providers taking judgement against you, with the resultant actions in the form of garnishees and/or repossession. Once judgement has been taken against you there is very little assistance available to you and you are absolutely at the mercy of your credit providers.

Approach the Bank

This is a valid option but only in the following circumstances:

  • You have a problem of a temporary nature and will be able to recover fully within a period of 6 months. Failure to adhere to the Bank’s proposal will result in legal action and judgement will be taken against you.
  • Telling the Banks you cannot pay is regarded as a deed of insolvency. This immediately raises red flags with the banks, immediately pushing you into a higher risk category with the resultant increase in your interest rates. This is therefore an option but you must be convinced that your problems are short term and you will be able to comply 100% to the banks proposal.

Debt Counselling

Debt Counselling is the preferred choice should you not be in a position to pay your debts over the medium term. Why do we say that? Mainly 3 reasons:

  • Debt counselling is a regulated process under the National Credit Act. The moment you apply for debt counselling you receive the protection under the Act and no legal action can be taken against you. If you have waited too long and legal action has already been taken you forfeit your rights under the act. So act promptly!
  • Your repayment to your credit provider is calculated based on what you can afford. The pressure on the household is immediately less.
  • We negotiate a repayment plan with your credit providers based on the amount you can repay. The rules to be applied are the following:
    • Houses 80% of original monthly instalment;
    • Cars 70% of original monthly instalment;
    • All other unsecured debt is paid off over a period of 60 months (in some cases over a longer period);
    • We try to negotiate a 0% interest rate, however, this cannot be guaranteed.

These benefits are just too important for us not to bring to your attention. We can and will do the same for you. Please contact us so that we can give you peace of mind.

We promise you that the anxiety, depression that most of our customers suffer from and the lack of motivation for the future will disappear. You owe it to yourself.

Lastly we would just like to address the last fear. I will not have access to credit once I am finished with Debt Counselling. Why is this absolutely untrue?

To give one Example; ABSA has created a new account only for people under debt counselling. I had the head of ABSA debt counselling in my office when we discussed the account and he has stated categorically that the account has been created to assist people during the difficult times, and if they manage the process well, ABSA will give them full credit once out of the process the very next day, purely based on affordability. We cannot give you a better example to counter these wrong perceptions than with these steps taken by ABSA.

Get More Info or Apply here