Debt counselling is an effective way of helping people who are struggling with debt. Unfortunately, a lack of understanding about the process, misinformation and concerns about being stigmatised mean some consumers don’t seek help or leave it too late.
How debt counselling works
We're here to help
The National Debt Counselling Association aims to better inform the public about debt counselling, challenge misconceptions and create an understanding that if you’re in financial difficulty, getting help is a responsible thing to do.
Many people who could really benefit from debt counselling instead try to manage their financial situation themselves, potentially getting deeper into difficulty and ultimately risk their homes and cars being repossessed — all because they didn’t understand the process, heard some rumour or were too embarrassed to speak to a reputable debt counsellor.
The reality is that South Africa’s debt counselling sector is world class. It’s well structured, highly regulated and it works.
The National Debt Counselling Association members are here to help South African consumers. Over the past five years our members have granted thousands clearance certificates to clients who have successfully completed the process.
What is debt counselling like with an NDCA member?
These are testimonials received by our member companies:
Our members
What debt counselling process can you expect from our members?
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Application
When you contact a reputable debt counsellor you will be given a free debt assessment to determine your level of debt and whether debt counselling is a potential solution for you.
If the assessment determines you are over-indebted and could benefit from debt counselling, you then decide whether to formally apply.
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Protection
If you decide to go ahead, the debt counsellor will do most of the heavy lifting by informing all your creditors and the credit bureaus - via the National Credit Regulator’s debt help system - that you have applied for and are undergoing debt counselling. This helps alleviate a lot of stress as creditors should then deal directly with the debt counsellor and not harass you.
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Lower rates negotiated
As part of the process the debt counsellor negotiates reduced monthly payments on all credit agreements that fall under the National Credit Act. This restructuring of debt is done within defined industry parameters and strikes the balance between your ability to pay and your overall debt levels. It is not something most people can easily or efficiently do on their own.
Once more affordable repayment terms are negotiated, your rearranged debt is approved at a court or the National Consumer Tribunal to ensure the renegotiated rates are fixed for the duration of the debt counselling. This means creditors cannot change the terms or demand higher payments.
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Single monthly payment
You will make one affordable payment each month, via a debit order or debicheck transaction, which is distributed to creditors included in the debt counselling for the duration of the plan.
All National Debt Counselling Association members have client-service staff who are available throughout the process to offer advice and support.
Debt counselling usually lasts for between three and five years, depending on the amount of debt, the arrangements the debt counsellor is able to negotiate with creditors and what you can afford to repay each month.
Should your financial circumstances improve you can increase the monthly payment or pay a lump sum to reduce the period or end the process. This is encouraged.
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Clearance certificate
When the payment plan is successfully completed you will receive a clearance certificate confirming all the accounts listed under the debt counselling are paid up. Home loans are the exception. These do not need to be fully paid but must be up to date. The debt counsellor will ensure that the credit bureaus receive the certificate.
