At times and for many reasons such as recession, change in circumstances and others, consumers find themselves in a debt trap and no longer able to pay their monthly debt repayments. Consumers who are in this situation should not hide, feel despondent or despair; there is a debt relief measure in terms of the National Credit Act (NCA), which could provide relief. This debt relief measure is called debt counselling and is offered by National Credit Regulator’s (NCR) registered debt counsellors, says Kedilatile Legodi, Manager: Debt Counselling at the NCR.
Through debt counselling, consumers can be assisted by getting advice on how to budget and a debt counsellor will negotiate with credit providers on behalf of the consumer for reduced payments and ultimately restructure their debts.
“To be able to go under debt counselling, a consumer must be employed and have an income which will be used to offer reduced payments to credit providers”, clarifies Legodi.
Consumers’ attention is drawn to the following important things to note if they are considering debt counselling:
- Only make use of NCR registered debt counsellors. Upon registration, the NCR issues the debt counsellor a registration certificate and a window decal (green sticker) as a means of identification to consumers. If they are not visible, please request them from the debt counsellor;
- Understand the debt counselling process, your rights and obligations prior to applying for debt counselling;
- If you are married in community of property, you must jointly apply for debt counselling with your partner;
- All debt counselling applications must be reduced to either a court or consent order;
- Debt counselling service is not free of charge – visit the NCR website for a fee guideline on ncr.org.za and request a written disclosure of applicable fees prior to applying for debt counselling;
- You have a right to request for, and be provided with reasons if your application for debt counselling is rejected;
- Do not give/pay the debt counsellor money to pay your credit providers. You can either pay your credit providers directly or use a Payment Distribution Agent (PDA) that is registered with the NCR. There are currently only four NCR registered PDAs whose details can be found at ncr.org.za or by calling the NCR on 011-554-2600;
- If you experience any challenges under debt counselling, your debt counsellor is your first point of contact. Make use of your debt counsellor and always ensure that you are kept in the loop on the progress of your application;
- If your debt counsellor is un-contactable, please contact the NCR immediately for assistance.