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What is a Debt Counsellor?

Contemplating whether, or not, you need a debt counsellor? Perhaps you’re not even 100% sure what debt counsellors are, or what they can do for you.

If you’re struggling with debt, however, it’s critical to know what your next moves are and how to recover your debt and ultimately, your credit score, without getting into more financial trouble.

It is precisely why you need a debt counsellor. A debt counsellor will establish all your financial details with you, including your current debt, your income and even your living expenses.

After obtaining this information, he or she will also establish whether you can repay your debt and set up an affordable repayment method for you while keeping your creditors happy and at bay.

They will thus contact your creditors to extend the repayment period of your debt to have your payments reduced, for you to be able to afford them. If you have a lot of debt, hiring a debt counsellor to negotiate with your creditors will be beneficial to both you and your creditors.

It is because debt counsellors find a way for you to pay back some of your debt, which for creditors is already a big help, as opposed to them receiving nothing at all and you being blacklisted, or even declaring bankruptcy at the end of the day.

Debt Counselling and Legal Authority

Hiring a debt counsellor is very helpful to anyone trying to get out of debt. Upon the counsellor negotiating with your creditors, and they agree on your repayment proposal, you will receive a consent order form, issued by either the National Consumer Tribunal (NCT), or the magistrate’s court, and will officially receive debt counselling.

The Legal Role of a Debt Counsellor

Debt counsellors work with a variety of different individuals and are set out to provide both practical, as well as emotional support, to help these individuals be able to manage their personal debt.

They are responsible for managing any complex debt situation they are presented with and, also help people manage their finances to be debt-free. They are also known to provide practical advice and help clients who have too much debt, or whose debt has got out of control.

They also provide their clients with solutions for financial planning, present and future budgeting, managing their money properly, so they never experience a debt problem again, as well as bankruptcy.

In addition, they also liaise with their creditors and provide legal advice, as well as support on behalf of their clients, provide legal advice and support in the case of court proceedings.

When it comes to not only having a lot of debt but being in trouble as a result thereof, you might feel anxious and stressed about your financial situation and even blame yourself for how you got there. Holding onto any mistakes you’ve made in the past, however, will not help you at all. Debt counsellors are there to assist with all your debt problems and queries. If you’re experiencing any issue with debt, you should seek help today. It will allow for peace of mind, knowing you have a professional to rely on, someone that has your financial interest and well-being as a result thereof, as a priority.

Debt Counsellor Responsibilities:

  • Assessing their clients’ monthly income and expenses.
  • Liaising with clients about their debt situation.
  • Prepping their clients’ monthly payment plans, which is aimed towards solving their debt problem and eventually pay off their debt.
  • Working with their clients to determine priority payments.
  • Providing emotional support and advice to their clients.
  • Communicating with their clients during the process of their debt status changing.
  • Managing all financial paperwork and processing the relevant documentation.
  • Negotiating and liaising with creditors, to plan for realistic repayments for their clients.
  • Working towards obtaining access to their client’s benefits.
  • Providing advice for financial planning, money management and budgeting.
  • Providing legal support, along with advice to clients.
  • Attending court hearings.
  • Providing support to their clients with regards to bankruptcy or in the case of debt reaching a point of being out of control.

How to Choose a Debt Counsellor?

Choosing a debt counsellor isn’t as easy as one might think. Although they are nearly all equipped and skilled to manage one’s debt professionally and ethically, there are some characteristics and requirements that one must look out for and take note of.

First and foremost, your debt counsellor must be qualified to provide you with debt counselling services. If he/she is working with a company, which is the usually the case, the company must be registered with the national debt counselling initiative within your country of relevance, which for South Africa, is the National Credit Regulator (NCR).

Being registered with the NCR will allow you to rest assure that he/she is thoroughly knowledgeable, helpful and qualified to assist you, supporting you until your debt and financial situation is settled.