What is debt counselling?

Debt counselling is one of the debt relief measures available to South Africans and provided for in the National Credit Act. This process is intended to assist over-indebted consumers struggling with debt, through budget advice, negotiation with credit providers for reduced payments and restructuring of debts. It is not a savings mechanism. Do not be fooled by being told that you will save up to 60% of your monthly income.

Is debt counselling and debt review the same thing?

Yes, the terms are used interchangeably.

Who is eligible to go under debt counselling?

Any consumer experiencing or is likely to experience debt-related problems and is having difficulty making his/her current monthly payments. A consumer who is over-indebted may approach a debt counsellor directly, or may be referred to a debt counsellor by his/her creditor/s, the magistrate court or the National Credit Regulator. The consumer must choose his own Debt Counsellor and should also have a distributable income which will be used to offer reduced payments to the credit providers.

If under debt counselling, and a consumer experiences a change in circumstances (e.g. temporary loss of income, salary reduction, retrenchment of partner etc.), can they get assistance from their credit providers regarding the cahnge in their circumstances affecting their current budget?

The debt counsellor must follow the guidelines issued by the National Credit Regulator regarding Change in Circumstances. In this process, the debt counsellor negotiates new or interim terms with the credit providers to allow for the change in circumstances. Please see below link for the guidelines, these can be found on the NCR website.