Debt Counselling Services and the National Credit Agency
Receiving debt counselling services and entering the debt review process gives you debt protection against your creditors claims. This means that during period of debt review, your creditors may not contact you directly and harass you for payment. They will also not be able to take any legal or other action against you. As you will no longer be paying money directly to your creditors, there will be no reason for you to contact your credit providers and all communication will go through your debt counsellor. Your debt counsellor will also inform all your creditors of your debt review status and negotiate new terms to your original credit agreement. These terms will usually be more favourable than your previous arrangements.
Once your debt counsellor has negotiated a lower interest rate and monthly repayment with your creditors, he or she will draw up new repayment schedule. This schedule will then be submitted to the National Credit Agency to whom you will pay a specified amount every month which is affordable and well within your means. The National Credit agency will redistribute this amount to your creditors to meet your monthly obligations. It is however very important to note that should you not make the required payments to the National Credit Agency, you will forfeit the right to any debt protection that you would normally receive through debt counselling services.
The debt review process was instituted by law to protect consumers from reckless lending and to provide the millions of over indebted South Africans with a means to repay their debt quickly and conveniently. This does not however mean that your debt will be settled for you and that you will automatically be cleared of your financial obligations.
To find out more about debt counselling services, and how you can enter the debt reveiew process and begin eliminating your debt, please contact us.
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