21 May Top 10 FAQs About Debt Counselling Answered

Being over-indebted is a very real struggle for many South African consumers. It happens unintentionally over time and can negatively impact your quality of life. Choosing the right debt help system for you gives you the chance to regain financial control. At True North Debt, we offer a result-driven Debt Counselling service to put an end to your debt woes for good. Here are the Top 10 FAQs about debt counselling answered:

What is Debt Counselling?

Debt counselling (or Debt Review) is a legal debt relief process under the National Credit Act (NCA). If you are over-indebted, Debt Counselling helps you repay your creditors through a more manageable monthly repayment plan. A Debt Counsellor from our team assesses your finances and negotiates better terms and, if possible, lower interest rates with your creditors. During the process, you are responsible for one newly structured repayment each month that covers everything you owe. This is handled by a Payment Distribution Agency (PDA).

Do I qualify for Debt Counselling?

If your monthly debt repayments exceed your income, you are considered over-indebted. We assess your finances and affordability to determine if you qualify for Debt Counselling. Other types of debt help systems are available to South Africans who may not be suited to the Debt Counselling. Here is an example of over-indebtedness.

Will I be Blacklisted if I do Debt Counselling?

No, you won’t be blacklisted. It is important to note that you will be flagged as under debt review, meaning you can’t take on more credit while in the process. This measure helps achieve your goal of overcoming your debt by focusing on the finishing line.

Can Creditors Take Legal Action Against Me?

There are many benefits to Debt Counselling, including protection from your creditors. While you are undergoing Debt Counselling, your creditors and debt collectors may not contact you in any way. This means no harassing calls or emails. During the process, they may not take legal action against you for your debts, which includes repossessing your assets.

How Much Does It Cost?

You will pay one reduced, consolidated monthly amount based on what you can realistically afford. Our True North Debt team work with your creditors to lower your interest rates and extend payment terms, making your monthly instalments manageable. You will also be charged Debt Counselling fees, which are regulated by the National Credit Regulator (NCR) and are included in your monthly repayment.

How Long Does the Process Last?

The time frame for completing Debt Counselling is different for everyone. It typically takes between 3 and 5 years to complete the process. If you can pay more towards your debts, you can finish Debt Counselling more quickly.

Can I take out Loans During the Process?

No, while under Debt Counselling, you won’t be able to acquire any new credit. This restriction is temporary. By not being able to take out loans or new debt, you can break the debt cycle and work towards financial stability for your future.

Will Debt Counselling Remain Private?

Yes, Debt Counselling is completely confidential, and our team handle the process discreetly to protect your rights. It does not get reported to your employer, and you are not legally required to tell anyone unless you choose to.

What Happens Afterwards?

Once you’ve paid off all your debts through successful Debt Counselling, you will be issued a Clearance Certificate. Your debt is officially settled, and you are removed from the system. It might take a few months, but you can apply for credit again soon.

How Can I Start?

If you are ready to get your debt under control, we can help you! Our Debt Counsellors are all registered with the National Credit Regulator (NCR). Are you still unsure whether this is the right step for you? Here we answer: Is Debt Review good or bad (the pros and cons), to help you decide. Contact us today to get started!