Before The National Credit Act came into effect in 2007, consumers did not have many rights when it came debt. They had no choice but to either pay the debt or suffer asset loss through debt resolve processes such as bankruptcy or sequestration. However since 2007, consumers have been given protection under the law in the form of financial debt counselling.
Financial debt counselling services in South Africa are about helping consumers with an over-indebted financial situation find a means to resolve these debts by providing them with advice and debt intervention help.
Firstly it encompasses an analysis of the finances of the consumer and should it emerge that they are a financial debt counselling candidate a restructuring of their budget in order to determine how much money they have available for monthly debt payments.
Once these amounts have been determined the next financial debt counselling service provided is crucial negotiations with creditors in order to reduce payments due – this will mean that the debts can be paid using the amount that has been worked out. If the creditors accept these negotiations, payment on the debt resumes, but under new terms.
Financial debt counselling is the only debt remedy in South Africa that can protect a consumer against legal action from a creditor and assure their assets won’t be seized.
South African consumers are in the fortunate position to be able to take control of their debts through financial debt counselling services. Put an end to creditor demands and endless phone calls today by applying for financial debt management.
Article written by: Andrea van Tonder 06-2013