Debt counselling can save many homes, cars and assets

Members of the public have been urged to consider debt counselling as a debt relief measure before their homes, cars and others are repossessed.

The National Credit Regulator (NCR) has called on the South African public to avoid losing their assets to credit providers by taking up debt counselling. According to the NCR acting manager for education and communication Kedilatile Legodi, although many sectors have been allowed to get back to work, many South African households are in significant financial hardship and others have been struggling to make ends meet even before the Covid-19 pandemic. Many of them could benefit from this debt relief measure as it intends to assist over-indebted consumers struggling to repay their debts through the restructuring of their debts and making repayments manageable.

The NCR listed the following benefits of going into debt counselling:

• It provides an opportunity to repay debts without borrowing more money or taking on extra debt.
• If you apply before credit providers institute legal action to enforce the debt, you receive protection against such legal action and repossession of your assets.
• If you continue making repayments whilst under debt counselling, you will still be protected from repossession of your assets until all your debts are paid up.
• Essential/living expenses such as groceries, school fees and others are taken into account before a determination of how much is available to offer towards your debts.
• A registered debt counsellor negotiates reduced repayments on behalf of the consumer, using the consumer’s existing income.
• There is no timeframe for a consumer to be under debt counselling as the term is dependent on the consumer’s financial circumstances such as debt, income, living expenses and others.

Consumers should note the following when considering debt counselling:

• To apply for debt counselling, a consumer must have an income
• You cannot go under debt counselling if you are still under debt administration
• Once you apply for debt counselling, you will not get any further credit and your name will be flagged at the credit bureaus. This is not a listing, but an indicator that you have applied for debt counselling
• Debt counselling is offered by NCR registered debt counsellors and you can verify their registration status with the NCR by visiting the NCR’s website on www.ncr.org.za or calling on 0860 627 627
• Debt counselling is not offered for free. The debt counselling related costs should be explained to consumers upfront by the debt counsellor and these fees can be confirmed on the NCR’s website (www.ncr.org.za) under guidelines

The NCR was established, amongst others to ensure compliance with the NCA, receive and investigate complaints. If consumers are unhappy with the service provided by debt counsellors, credit providers, credit bureaus or PDAs, they are invited to lodge a complaint with the NCR at complaints@ncr.org.za; concludes Legodi.