He said that even with relief measures, such as payment holidays, consumers who were struggling to make make ends meet before the lockdown could now be in serious trouble.<\/p>\n
\u201cThe lockdown probably forced many consumers to assess their financial situation,\u201d said Sager.<\/p>
\u201cSome will have realised how much difficulty they are in, but they might be reluctant to seek help either because they don\u2019t know where to turn or are embarrassed.<\/p>\n
\u201cPeople in this situation should understand they\u2019re not alone. There are options and they need to act before they face the possibility of their house, cars or other assets being repossessed.\u201d<\/p>\n
Debt counselling is one of these options.<\/p>\n
South Africa is fortunate to have a debt counselling sector that is considered world-class and is highly regulated, efficient and effective.<\/p>\n
ALSO READ:<\/p>\n
Financial preparation is of vital importance for prospective parents<\/a><\/p>\n Consider the consequences of financial decisions<\/a><\/p>\n Here are Sager\u2019s answers to some commonly asked questions about debt counselling:<\/p>\n \u2022 What is debt counselling and how do I know if it\u2019s for me?<\/p>\n \u201cDebt counselling was introduced as part of the National Credit Act in 2007,\u201d said Sager.<\/p>\n \u201cIt helps over-indebted or soon-to-be over-indebted consumers repay their outstanding debt through an affordable repayment plan that is agreed with all creditors.<\/p>\n \u201cWhile there is a technical definition of what over-indebtedness is, a good rule of thumb is that if you\u2019re struggling to pay your debts on time or a feeling distressed about your financial situation you should talk to a debt counsellor.<\/p>\n \u201cAnyone who is struggling with debt can apply. If you are married in community of property you must apply with your spouse.\u201d<\/p>\n \u2022 How does it work?<\/p>\n \u201cWhen consumers contact a registered debt counsellor, they should be given a free debt assessment,\u201d explained Sager.<\/p>\n \u201cThis will determine your level of debt and whether debt counselling is a suitable option.<\/p>\n \u201cIf the assessment determines you are over-indebted then may formally apply for debt counselling and once you do so, the debt counsellor will do most of the heavy lifting, informing all your creditors as well as the credit bureaus that you have applied.<\/p>\n \u201cThe debt counsellor would then negotiate on your behalf with all your creditors in a bid to reduce monthly payments on all credit agreements that fall under the National Credit Act.<\/p>\n \u201cThis is done within agreed industry norms and is based on what you can afford. It is not something most people can easily or efficiently do on their own, especially when there are several creditors involved<\/p>\n \u201cOnce more affordable repayment rates are negotiated, your \u2018rearranged debt\u2019 is then approved by a court or National Consumer Tribunal to ensure the renegotiated rates are fixed for the duration of the debt counselling.\u201d<\/p>\n \u2022 How do I choose a debt counsellor?<\/p>\n \u201cAll debt counsellors are registered by the National Credit Regulator and registration information can be found on the NCR website,\u201d said Sager.<\/p>\n \u201cChoose a debt counsellor who is registered with the NCR.<\/p>\n \u201cAsk the debt counsellor if they use the Debt Counselling Rule Set system, which is the industry golden standard and benefits consumers and creditors alike.\u201d<\/p>\n \u2022 How do the repayments work?<\/p>\n \u201cYou will make one affordable repayment each month,\u201d said Sager.<\/p>\n \u201cThis is paid to an Independent Payment Distribution Agency \u2013 also overseen by the National Credit Regulator – which distributes the money on your behalf to all the creditors included in the debt counselling for the duration of the plan.<\/p>\n \u201cDebt counselling is highly regulated, and all the relevant fees are built into the single payment amount. The National Credit Regulator sets the fee guidelines.\u201d<\/p>\n \u2022 How long does debt counselling take and once it is approved am I on my own?<\/p>\n \u201cDebt counselling usually lasts between three to five years, depending on the amount of debt, the arrangement the debt counsellor is able to negotiate and what you can afford to pay each month,\u201d said Sager.<\/p>\n \u201cThe debt counsellor\u2019s service staff are available throughout the process to offer advice, support and communicate with creditors.\u201d<\/p>\n \u2022 Can I still apply for credit while under debt counselling?<\/p>\n \u201cNo,\u201d said Sager.<\/p>\n \u201cOnly once you have completed the programme and received a clearance certificate can you again apply for credit.<\/p>\n \u201cThen it is advisable to draw up a realistic budget and discuss this with the debt counsellor or a financial advisor before applying.\u201d<\/p>\n Hav<\/strong>e a story?<\/strong><\/p>\n Contact the newsroom by emailing: Melissa Hart (Editor)\u00a0<\/span>germistoncitynews@caxton.co.za,<\/a>\u00a0<\/strong>Leigh Hodgson (News Editor)\u00a0<\/span>leighh@caxton.co.za\u00a0<\/a><\/strong>or Busi Vilakazi (Journalist)\u00a0busiv@caxton.co.za.<\/strong><\/a><\/p>\n Also follow us on:<\/p>\n
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