What to Consider Before Meeting with a Debt Counsellor

Have too much debt? Perhaps you’re feeling overwhelmed, or don’t know how to deal with the amount of debt you’ve got yourself into.

When it comes to having too much debt, you’re not alone. Millions of South Africans have some form of debt, and the majority don’t have the good kind.

What is bad debt, or a dangerous amount of debt? It’s the inability to repay the money you’ve loaned in the form of credit, to either a store(s), a company, or financial institution.

When you can’t pay back debt, it opens the door to a lot of problems, which include a bad relationship with debt collectors, financial institutions, and also obtaining a bad credit record. In return, it won’t allow you to receive more credit, nor be able to take out a loan for an extensive period. At least, not until you’ve paid back your debt, which will still leave you with a track record of not being able to pay your bills on time.

Getting Help

Whether you’ve lost your job or spent too much credit that you couldn’t afford, there is always a way to get out of it. For those who are deeper in debt, it might take a longer time, but for others, something as simple as consulting with a debt counsellor can help you get out of any trouble you might have with creditors, and eventually clear your credit record.

Before Choosing a Debt Counsellor

Like with anything else, you first need to consider the pros and cons of everything you enter in. Giving that you’re in a situation of needing help from a debt counsellor, it is recommended that you consider the following, before choosing a debt counsellor.

  • There is a chance that your debt counselling application might get rejected – This might be unsettling to say the very least. The last thing you need is getting rejected when trying to seek help. Just because one debt counsellor doesn’t think your debt review doesn’t qualify for their services, doesn’t mean there isn’t another debt counsellor that won’t help you.
  • Check whether your debt counsellor is registered – There are many companies out there that aren’t registered in terms with the National Credit Act, which means that you’ll be paying for services that aren’t ethical at all.
  • Unless your debt review goes well, you won’t be able to obtain credit for a long time – Just because a debt counsellor reviews you and chooses to help you get out of debt, doesn’t mean that you’ll be able to get credit again for an extended period. Debt counsellors thus only offer their service, to help you settle your debt and eventually help you clear your credit record.
  • Getting debt review means that you’ll be listed with a credit bureau – This is generally something that scares people away. It’s not bad for you. It just means that the credit bureau is taking note of your effort to consult with a debt counsellor, to be able to pay back your debt. You will be removed from the listing as soon as you get a clearance certificate.