FAQ: Debt Counselling

What is Debt Counselling?

Debt counselling is a regulated process designed to assist individuals who are struggling to meet their financial commitments. It offers a structured plan to manage debts more effectively.

How Does Debt Counselling Work?

In a nutshell, a Debt Counsellor takes a deep dive into your finances. They’ll look at your income, expenses, and debts. Then, they’ll work out a new payment plan with your creditors. You’ll make one reduced monthly payment to a Payment Distribution Agency, which then pays your creditors.

Why Choose Debt Counselling?

Debt counselling provides a legal and structured pathway to financial stability. It helps you consolidate your debts into a single, affordable monthly payment, while also offering protection from legal actions by creditors.

What is Debt Counselling in South Africa?

In South Africa, Debt Counselling is a regulated process under the National Credit Act. It’s designed to help South Africans who are struggling with debt to find a manageable way to get back on their feet financially.

How Long Does Debt Counselling Take?

The length of the Debt Counselling process varies. It depends on how much debt you have and how quickly you can pay it off. Typically, it can take anywhere from 24 to 60 months.

How Does Debt Counselling Work in South Africa?

In South Africa, Debt Counselling starts with a formal assessment by a registered Debt Counsellor. They’ll negotiate with your creditors and create a new payment plan. This plan is then made an order of court, giving you legal protection.

How to Get Out of Debt Counselling?

Exiting Debt Counselling is possible once all your debts are paid off, except for your home loan. You’ll receive a Clearance Certificate, and your credit record will be updated. If you want to exit early, you’ll need to settle all your debts or show you’re able to handle them yourself.

What are the Costs Involved in Debt Counselling?

There are fees for Debt Counselling, but they’re regulated. Usually, you’ll pay an application fee, a restructuring fee, and a small monthly after-care fee. These are often included in your new payment plan.

Can I Get Credit While Under Debt Counselling?

No, you can’t. While under Debt Counselling, you’re legally not allowed to take on more credit. It’s all about helping you get rid of debt, not make more.

Is Debt Counselling Confidential?

Absolutely. Your financial situation is your business. Debt Counselling is a confidential process, and your information won’t be shared without your permission.

What Happens if I Miss a Payment?

Missing a payment can be risky. It might make your Debt Counselling court order null and void, and creditors could take legal action. Always talk to your Debt Counsellor if you’re struggling to make a payment.

Can I Choose My Own Debt Counsellor?

Yes, you can! But make sure they’re registered and have a good track record. Better yet, choose a ZapDebt partner for expert help tailored just for you.

Considering Debt Counselling? ZapDebt is here to help connect you with leading Debt Counsellors across South Africa. Don’t wait book your free consult today!

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