Debt Counselling

WHAT IS DEBT COUNSELLING?
Debt counselling is a formal legal debt relief measure introduced to assist over-indebted consumers through the debt review or debt counselling process, as stipulated in Section 86 of the National Credit Act (NCA) 34 of 2005. Debt counselling was established to help consumers with high debt levels resolve their financial issues. It is important to note that the average household debt to disposable income ratio in South Africa is approximately 72%, one of the highest in the world. This indicates that, on average, 72% of the monthly take-home pay of South African households is allocated towards debt repayment.
WHY WAS DEBT COUNSELLING INTRODUCED?
Obtain the necessary information before applying for debt counselling. The primary reasons for the introduction of the debt counselling solution are as follows:
- To assist over-indebted consumers. A consumer is considered over-indebted if they are unable to meet all their monthly debt obligations.
- To identify and profile instances of reckless lending with the objective of having such cases suspended.
WHAT ARE THE BENEFITS OF DEBT COUNSELLING?
One of the most significant benefits of debt counselling is the improvement of your financial habits. Debt counselling fundamentally alters your approach to money management. During the counselling process, you learn to reduce spending and make purchases with cash, thereby living within your means. Consequently, you gradually become debt-free
The premise of debt counselling, which prohibits borrowing, ensures that its primary focus is on debt elimination. Once you achieve a debt-free status, you can begin to build wealth by engaging more in savings and investments. This is the ideal position for those who wish to accumulate wealth and retire with dignity.
HOW LONG WILL DEBT COUNSELLING LAST?
In general, it takes approximately 3-5 years to complete a debt relief plan. However, the duration depends on several factors, primarily the amount of debt you have and your willingness to make monthly payments towards servicing your debt. Debt counselling is flexible in that, if you are committed to making higher payments, you can expedite the repayment process and exit the plan sooner.
What do I mean by this? I am pleased that you inquired. At Simunye Debt Advisory, we do not restrict any of our clients. If you come into a sum of money, such as an inheritance from a wealthy relative, and wish to pay off all your accounts to exit debt review, you are indeed able to do so.
There are no penalties for expediting the repayment of your debt. At Simunye Debt Advisory, as specialists in debt counselling, we actively encourage our clients to be proactive in settling their debts swiftly. This approach enables them to embark on a new journey of savings, investments, and wealth-building. Regardless of any initial beliefs held when the loans were taken out, it is now imperative to focus on eliminating them.
DO YOU NEED DEBT COUNSELLING?
Individuals who allow their debts to accumulate before seeking advice often discover:
- Their credit cards are fully utilized;
- Circumstances have become unmanageable;
- No other lenders are willing to extend credit to them; and
- It requires significantly more time to repay their obligations.
Our certified debt counsellors will
- Never judge you or make you feel uncomfortable about your situation;
- Always be willing to engage with you, regardless of the magnitude of your concern;
- Identify methods to manage your debts even if you believe you have no disposable income; and
- Propose strategies for managing debts that you may not be aware of.
- At the conclusion of the debt counselling session, you will experience reassurance knowing that various options are available to you and that you are not alone.