Credit vs. Saving
In South Africa, the Debt Counselling National Credit Act promotes an efficient, ethical and transparent credit industry, by protecting consumers from the repercussions of over-indebtedness and reckless lending. In life, we often want or need material things sooner than we can afford to pay for them. As such, we too quickly turn to credit or loans, instead of saving up as we should, in order to buy that car, furniture or clothes at a later stage. Many of us earn so little or spend so much that we can barely afford to make ends meet, so we just scrape by, surviving by the skin of our teeth, ending up with too much month at the end of our money, scarcely able to spare a rand.
Slippery Debt Slope
However, as those who have previously been over-indebted warn, it’s always better to save and buy later, rather than voluntarily subject yourself to the slippery slope that is debt. Regrettably, most consumers aren’t put off by the many risks involved with taking out credit, opting instead for reckless borrowing, while the slow creep of over-indebtedness incrementally consumes their lives. Considering how dangerous the credit market can be for a consumer, the Debt Counselling National Credit Act was crafted as a consumer tool for finding one’s way out of debt.
National Debt Advisors
Registered professional Debt Counsellors will uphold your rights under the Debt Counselling National Credit Act to assist you with your debt troubles. National Debt Advisors will design a more reasonable debt repayment plan for you that’s within your means, by negotiating with your creditors to ensure you can meet your monthly payments. The idea behind the Debt Counselling National Credit Act is to help consumers reduce their credit debt in a more cost-effective way.
Before 2005, there was no legal framework in place for the Debt Counselling National Credit Act. There were only two legal process that consumers could opt for if they couldn’t afford to pay off their debts, namely administration and sequestration. These two legal processes have harsh drawbacks and have the effect of disempowering consumers, as your income is forcibly taken away from you while under administration, and you lose your assets under sequestration.
The Debt Counselling National Credit Act
The disempowerment of consumers needed to be addressed and, thus, the Debt Counselling National Credit Act was introduced, with the National Credit Regulator to oversee the process. The Debt Counselling National Credit Act prevents creditors from harassing you or auctioning off your assets. Also, the in duplum rule under it limits the amount of interest your creditor can charge on your debts. Most importantly, the Debt Counselling National Credit Act allows you to become debt free, without having to live in poverty or sacrifice your assets.