NATIONAL NEWS - Enquiries about debt counselling have grown significantly in 2021. This is according to the National Debt Counsellors’ Association (NDCA).
Association chairperson Benay Sager says the increasing numbers are not unexpected given the effect of successive lockdowns on an economy that was already struggling before the pandemic.
“Loss of income, salary reductions, bonuses and incentives that have been reduced or not paid at all, combined with payment holidays coming to an end and already high levels of household debt, means people who were previously just about getting by no longer could.”
He says there is a silver lining because the increase in enquiries points to financially stressed consumers also being more aware of debt counselling as a possible solution and becoming increasingly proactive in dealing with debt issues.
There are significant benefits to debt counselling.
These include:
“Then a clearance certificate is issued, and the consumer can again become credit active.”
Sager warns, however, that there are unscrupulous enterprises that try to take advantage of impatient consumers undergoing debt counselling and offer ‘debt review removal services’.
This violates the National Credit Act and consumers who are tempted could lose the protection from creditors that debt counselling affords.
“Debt counselling has many advantages, but consumers need to understand it is a commitment, not an instant solution. For people who stick with the plan and make their monthly payments, it works well, and the vast majority never fall back into unsustainable debt again.”
