There have been some scary projections made by the National Credit Regulator recently. Apparently more than 150 000 South Africans are expected to be under debt counselling by the end of 2009. However although this is punted as a scary thing it is in fact a good thing. Debt counselling was set up to help people who are over indebted to get out of the debt trap and take control of their personal finances again. So what does debt counselling entail?
The debt counselling process was set up under the National Credit Act which is designed to limit reckless lending and prevents people from becoming over indebted. Debt counselling is a way for you to take control of your finances after you already have debt trouble. With 150 000 people expected to enter debt counselling this year it is clear that debt is a major issue that is affecting a lot of people. People who are over indebted tend to owe many creditors and earn good salaries.
Many people have got into debt trouble via lifestyle debt, which had fuelled the last eight years of boom, debt was taken on for lifestyle products rather than as a way to invest for the future. People were encouraged to take as much debt as they could and spend it on things they did not need. Now the crunch has come and payback still needs to be made in the face of the recession. Debt counsellors can approach the courts to enforce the people you owe money to, to accept the new payment plan, this is backlogged at the moment but a debt counsellor will be able to help you protect your assets legally. Don't hesitate rather sort your debt now than after when the summonses come.
