Financial debt counselling works for the consumer, because it is a process designed to promote and protect the rights of the consumer. However it will only succeed if every party involved in the process agrees to fulfil their obligations. This entails creditors agreeing to new payment terms, the debt counsellor following legal precautions in their negotiations and the consumers accepting that the debt counsellor is working to help them.
One of the biggest benefits of financial debt counselling and one of the chief reasons that it truly works, is that no-one loses during the process. The creditor benefits from having a debtor who is willing to pay their debts, albeit over a longer period of time and the consumer benefits due to the fact that creditors are appeased and are no longer harassing them for payment.
Financial debt counselling is the only debt remedy that can promise a consumer protection against asset loss and legal action. This is because under the provisions of The National Credit Act, consumers are afforded these rights when they apply for financial debt counselling. Therefore consumers are given a period of time during which they can pay off their debts, but also breathe easy knowing that they can pay their creditors whilst still having enough money to cover basic living expenses.
The success of financial debt counselling can also be measured when one considers the education a consumer gets out of it. During their time under financial debt counselling, consumers can learn what the error of their ways were financially, while learning how to adhere to a strict budget. Therefore once the financial debt counselling period comes to an, the consumer is more frugal and knows how to manage their finances.
Article written by: Andrea van Tonder 06-2013