30/08/2018
The year 2018 came as a huge knockdown for a lot of South African consumers. The increase of VAT to 15% and the rapid increase of petrol has left consumers feeling the financial pinch. This has led to South African consumers finding themselves using their credit cards, personal loans and other credit facilities.
The average South African finds themselves paying plus minus 80% of their salary to debts. Leaving them with less to make it month to month. Bread and Milk can roughly cost you close to R50 alone so you can just imagine how much a month’s grocery can cost you with an average net of +/- R2000 left after having paid debts.
This leads to consumers going for extra credit to help them make it through the month, which leads to being over-indebted and affects your credit profile for future credit, employment, enrolling a child for school and applying for leasing through real estate agencies.
debt counselling, debt counselling in south africa, financial literacy and debt counselling
In 2007, the Nation Credit Regulator (NCR) introduced a debt relief known as debt counselling/ debt review. This is where a consumer applies to go under Debt Review by consulting a registered Debt Counsellor (DC) who will go through all your debts, monthly expenses and income to determine how indebted you are. Debt counselling comes with pros and cons. The Cons are that,
You will not be able to access credit as your profile will be flagged as under Debt Counselling with all the South African Credit Bureaus that are registered with the NCR. (Transunion, Compuscan, Experian, Clearscore just to mention a few)
You will be liable to pay the debt counsellor fees over two months ( The first month will go towards paying the DC and the second month will go towards paying for Legal fees), you will be liable to pay an aftercare fee to your DC every month until you have finished paying.
Once you have been declared indebted you can no longer be able to come out of the plan until you have finished paying off all of your debts or if you can prove that you can now be able to pay all of your debts and you are in a better financial state, through an attorney at your local Magistrate court.
Due to the fact that your monthly repayments are reduced, your term of payment can be a bit stretched longer
