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How to choose the best debt counsellor for yourself

by | May 4, 2022 | Personal Finance

​With most South Africans battling tough economic times, many people have found themselves falling behind on their debt repayments. According to the latest Q2 2021 South Africa Industry Insights Report released by Transunion, despite the fact that not a lot people have applied for new credit since pre-pandemic times, the total amount of outstanding balances on credit in the country has increased significantly.

This simply means that more people are battling to make ends meet and can no longer afford their monthly debt installments. For overindebted consumers, debt counselling, introduced by the National Credit Act, may be the lifeline that they need. Through the debt counselling process debt counsellors negotiate lower monthly installments with your creditors, leaving you with enough money to cover your household expenses like groceries, transport, and water and electricity. Studies show that debt counselling has successfully helped many people who were overwhelmed by their debt improve their financial position.

However, as the debt counselling industry grows and becomes more competitive, Founder and Debt Counsellor at National Debt Advisors Sebastien Alexanderson has warned consumers against falling victim to illegal fraudsters posing as debt counsellors.

He said, many scammers could claim to be debt counsellors and through unlawful and false advertising, making promises that are just too good to be true. As the National Credit Regulator outlines, the debt review process is not a savings plan or magic trick to make debt disappear, consumers still have to honour their credit agreements while under debt review.

Alexanderson says when it comes to debt counsellors, if it sounds too good to be true, it probably is. “When choosing a debt counsellor, be wary of entities that make wild promises like having your debt written off, repaying a large amount of your debt in a short period of time, and those that share publicity photos of senior government officials promoting their so-called service.”

He said the first thing anyone considering going under debt review should do is to properly research the debt counsellor. Enlisting the assistance of a debt counsellor is essentially handing over your financial situation to someone else, so it is crucial that you completely trust this person and their expertise.

Research the debt counsellor extensively online and check client reviews on social media as well as on hello peter. More importantly, check if the debt counsellor is registered under the National Credit Regulator (NCR), this information is available on the NCR website.

Secondly, ask your debt counsellor to explain all the details of the debt review process. If your debt counsellor still leaves you with more questions than answers, then they are probably not the best fit for you and your debt problem. The NCA also specifies debt counselling fee guidelines that all debt counsellors need to abide by. Make sure that your debt counsellor’s fee structure is in line with these guidelines.

“As Debt Counsellors our reputations are everything. We deal with sensitive information, often at sensitive times. As the industry grows more debt counsellors will come onto the scene and not all of them will be best suited to give the best advice. Our biggest challenge is maintaining industry wide integrity within a growing market,” said Alexanderson.

Contact NDA today and find out about our reputable and effective debt counselling services.

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