Why you should go under debt counselling in 2024

You should go under debt counselling in 2024 if you are struggling to make your monthly debt repayments. It's an opportunity for you to:

• Protect your home and your car. 
• Pay ONE affordable, reduced monthly debt repayment for all your debts. 
• A chance to rebuild/ improve your credit score. 
  
  
  

What is debt counselling in South Africa?

Debt counselling meaning:

Debt counselling, also known as the debt review process, was introduced by The National Credit Act (NCA) and is regulated by The National Credit Regulator (NCR). If you are struggling to pay off your debt, debt counselling could be the lifeline you need. It's a way to consolidate all your debt without taking out a debt consolidation loan.

If you want to find out more about how to choose the best debt review company in South Africa, read this blog post. One of the important criteria when choosing a debt review company, is choosing one with reputable debt counsellors. Meerkat is a reputable debt counselling company and our debt counsellors are registered with the National Credit Regulator.

How does debt counselling work?

The debt counselling process explained:

1. When you apply for debt review, a Debt Counsellor will assess your finances to determine if you are over-indebted. They will take your income and expenses into account here.
2. Once they have determined that you are over-indebted, they will negotiate with your creditors to reduce interest rates on your loans-this could end up saving you money on your total debt amount.
3. They will then work out a reduced repayment plan for you. Meerkat clients save up to 50% on their monthly debt repayments!
4. You then start paying ONE REDUCED monthly payment for ALL your debt!

Is debt counselling a good idea?

Debt counselling in South Africa is not just a good idea, but it is often the best solution for individuals who are overwhelmed by their financial obligations. With the rising cost of living and the economic challenges faced by many South Africans, it is not uncommon for individuals to find themselves drowning in debt. Debt counselling offers a way out of this vicious cycle and provides much-needed relief to those who feel trapped by their unpaid debts.

Debt counselling in South Africa is not just a good idea, but it is often the best solution for individuals who are overwhelmed by their financial obligations.

Benefits of debt counselling

One of the main benefits of debt counselling is that it helps individuals come up with a realistic and manageable repayment plan. A Debt Counsellor will assess the client's financial situation, including their income, expenses, and outstanding debts. Based on this assessment, the Debt Counsellor will negotiate with creditors on behalf of the client to reduce interest rates. This not only makes the debt more affordable but also ensures that the individual has a clear roadmap towards becoming debt-free.

Another advantage of debt counselling is that it offers legal protection to individuals who participate in the programme. Once a person enters debt counselling, their creditors are legally prevented from taking any legal action against them, such as repossession of assets like their house and their car. This protection provides individuals with the peace of mind they need to focus on repaying their debts without the constant fear of legal repercussions.

Who qualifies for debt counselling?

To qualify for debt counselling, you must be considered over-indebted. A few indicators that you may be over-indebted are:

1. You use credit to buy necessities like groceries or electricity. 
2. You've received a Section 129 Notice (A letter of demand).
3. You struggle to sleep at night because you're worried about money and how you will pay for all your bills. 
4. You borrow money to pay your bills. 

Read: How you do you know you're over-indebted?

How much does a Debt Counsellor cost?

The first thing that's important to note is that you should never pay fees directly to a Debt Counsellor. Your fees should be managed by a Payment Distribution Agency (PDA).

When it comes to the cost of debt counselling, usually your monthly repayment for the first 2 months is equivalent to your debt counselling fees. This monthly repayment will be based on your current financial situation, including your total debt amount and income, as well as the time it will take to complete the entire process. This means there isn't one standard fee for debt counselling. 

Does debt counselling affect your credit score?

Debt counselling is actually a way to improve your credit score. When you are under debt review, no further negative information will be added to your credit report. 

Why Meerkat?

Meerkat was voted as one of the Top 10 Large Debt Counsellors in South Africa. We're a financial wellness company committed to empowering South Africans to do MORE with their money. We've already helped thousands of people, we can help you too!

MyMeerkat FSP is an authorised financial services provider (FSP 50979) and registered Debt Counsellor NCRDC 2613.