Debt counsellor can be a scary word and immediately brings to mind images of blacklisting and sequestration, but that is exactly what a debt counsellor aims to prevent. With the promulgation of the National Credit Act in 2007, debt counsellors were introduced to the South African Market.
A debt counsellor is simply someone who negotiates a fair repayment scheme on the behalf of a consumer who finds themselves over-indebted. It is their job to contact creditors and inform them that the consumer is under debt review, and then facilitate an agreement that satisfies both the consumer and creditor.
Debt counsellors prevent legal action being taken, blacklisting and loss of assets. They are accredited and registered with NCR as stipulated in the National Credit Act, and although they charge a small fee for their service, they are an indispensable tool on the way to a debt free life.
A debt counsellor’s first interest is their clients, and they will study the consumer’s finances and eventually draw up a proposal to submit to creditors. These proposals can contain a reduction of repayments, or even a lessening of interest rates.
They are highly trained individuals who understand credit law and will use it to the advantage of the consumer.
Article written by: Andrea van Tonder 02-2013