What they do, when you may need one and how to find someone you can trust
When you keep running out of money to cover your monthly costs and debt, getting the right help can change your way forward.
Sometimes the numbers stop adding up. You pay for your basics. Then the debt payments are due and there isn’t enough money left to pay everyone.
Debt counselling, also called debt review, is one of the formal debt relief solutions available to anyone who is over-indebted.
But remember it doesn’t cancel out any of your debt. What it can do is help you find a more manageable way to repay all of it.
Should I talk to a debt counsellor?
Think about what happens to your money every month. After paying for things like food, rent or bond and transport, do you have enough money left to pay all your debts?
If the answer is often no, it may be time to talk to a registered debt counsellor.
Other signs include if you are using one form of credit to pay another, missing payments or falling behind because there isn’t enough money to go around.
What’s important to know here is that talking to a debt counsellor doesn’t mean you will immediately go under debt review.
A debt counsellor first looks at what you earn, your regular costs and what you owe to others to work out whether you are over-indebted and what options may help you.
What happens if I go under debt review?
If debt review is the best choice, your debt counsellor works out a new repayment proposal based on what you can afford.
This doesn’t mean your debt disappears or that you can stop paying it.
The aim of the debt review process is to make your repayments possible while you still pay back what you owe and often the Debt Counsellors negotiates lower interest rates for you to make it more affordable.
There are legal protections that come with debt review but there is also an important restriction. While you are under debt review, you generally can’t be given more credit.
Know what debt counselling will cost
Debt counselling isn’t free as there are fees for different parts of the process.
Before agreeing to anything, ask your debt counsellor what you will have to pay and to explain each fee, when you will pay it and what it is for.
If you don’t understand something, ask again before signing anything.
Make sure your debt counsellor is registered
Your debt counsellor must be an NCR registered debt counsellor.
Ask the person you’re considering to be your counsellor for their NCR registration number. Then check their name or registration number on the NCR’s online register.
If you have a concern about your debt counsellor’s delivery, start by raising it with them.
If the problem isn’t sorted out, you can contact the National Credit Regulator (NCR) for help or to make a complaint.
And remember to always keep your agreements, proof of payments, emails and other documents from the process.
You can’t go wrong by staying in the know about your debt review journey, every step of the way.
Get help if your debt has become too much
If you can’t afford your living costs and debt repayments month after month, it may be time to find out whether debt counselling can help.
You can speak to NCR-registered National Debt Counsellors about your situation and from there, decide if debt review may be right for you. At the same time, you can get your latest credit report through Finance365 to see the accounts and credit information recorded against your name.
