You have racked up quite a bit of debt, you’ve missed a few payments to credit providers here and there and you are taking out new loans or using your already extended credit card each month just to get by. Is there a cure? Actually yes – there is a great one. Debt counselling was introduced into the National Credit Act (NCA) 2007 as a solution to help over-indebted consumers manage and clear their debts.
Having realized that you have a problem and deciding to speak to a debt counsellor is the first step in the right direction. Some people find it hard to admit that they need help and try get out of the debt spiral by themselves. This often results in more debt that they owe to credit providers or friends or in losing their assets which they worked ever so hard for.
Debt counselling is the one solution that allows you to reduce your debt repayments, keep your assets and it prevents you from using more debt, thereby concentrating on getting debt free as fast as possible. But how do you choose who is going to help you, as it seems there are hundreds of debt counsellors out there?
It is also important to note that there may be a few fly-by- night, one-man shops out there. You need to choose a debt counsellor that will be there in the long run and is interested in helping you, not purely in it to make some money off of you. We have compiled a check-list to help you make the best decision.
1. Make sure that the debt counsellor is registered with the National Credit Regulator (NCR) by asking them for their NCR number (e.g. NCRDC 2955) or checking for yourself on http://www.ncr.org.za/register_of_registrants/registered_dc.php
2. Ask the debt counsellor if they use DCRS (Debt Counsellors Rule System). DCRS is a system which calculates how much you need to pay in order to be debt free within a specific period. The biggest benefit of DCRS is that it reduces the high interest rates on your debts, which knocks off a large portion of the money owed. DCRS can bring short-term debt interest rates down to as low as 0%.
3. Make sure that the debt counsellor is charging you the correct fees as stipulated by the NCR. These are capped and are paid to the debt counsellor for all the work that they do. ——Check the debt counselling fee guideline
4. It is important that you are able to contact your debt counsellor easily and that they respond to you timeously. Debt counselling will be an important part of your life for a few years so you must make sure that the party responsible for managing this for you is easy to get hold of. Test this by phoning into the call-center or emailing to see how quickly they answer.
5. Your debt counsellor should also by making use of Payment Distribution Agency (PDA) that you make your payments to. The PDA will take your new monthly debt repayment and then distribute it to each of your credit providers according to the new arrangements that your debt counsellor has made with them.
Free Call Back Form at Vantage Debt Management