Is debt counselling a good idea?

by | May 30, 2022 | Personal Finance

If you are struggling with your monthly debt repayments, you may have been told that debt counselling is the ultimate solution for over-indebtedness. However human nature still asks, is this really a good idea? After all, the last thing anyone battling with overwhelming debt needs is agreeing to something that will devastate their finances even further.

If you are asking yourself that question, the simple answer is, yes, debt counselling is a good idea for someone battling to meet all their debt obligations.

The National Credit Act introduced debt counselling in 2007 as a way of assisting overindebted consumers with dealing with their debt problem and eventually living debt-free lives through the legal and regulated process of debt review. According to the NCA, one of the key reasons the Act was established was to help overindebted consumers restructure their debt into installment amounts that are manageable to them. The entire process is legal and regulated by the governmental National Credit Regulator (NCR).

The benefits of the debt review process are several. The first is an almost immediate better quality of life. As soon as a consumer is placed under debt review creditors cannot take legal action. No more alarm bells when the phone rings, no more living in fear of losing your assets. Most of the mental and psychological strain has been wiped away.

Secondly, you only have to worry about paying, one, low monthly installment for all your debt. When you go under debt review, your debt counsellor will negotiate a better repayment plan with your creditors to make sure you never pay more than what you can afford. This will leave you with enough money at the end of the month to comfortably cover all your living expenses.

Thirdly, most debt counselling clients find that their money management skills improve after undergoing the process because, while under debt review, you are unable to incur further debt. This helps clients break the cycle of relying on more credit to solve their money problems and adopt healthier financial habits like saving, investing, budgeting, and discovering ways of earning extra income.

Finally, debt counselling offers overindebted consumers a second chance. Once all your debt has been paid off, and you are removed from the debt counselling program, you are granted a clean slate with no permanent record of having undergone debt counselling. It is true that the service is not free, and there are associated debt counselling fees that debt review clients will have to pay, but for financial freedom, that is the best money you will ever spend.

Founder and Debt Counsellor at National Debt Advisors Sebastian Alexanderson advised overindebted consumers to take back control of their lives and seek help. “In most cases, people do not become over-indebted overnight, but when it happens, it can become overwhelming. The road to recovery begins with joining a debt review program. The most important thing to remember is that if you sign up Debt Review, make sure you finish,” said Alexanderson.

Our debt counsellors at NDA care about your financial well-being and want to help you solve your debt problem. Find out about our NDA debt solutions and let us start your journey to debt-free living today.

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