“This was my first salary and I was so excited that I didn’t realise that I was taking out too many loans. I felt trapped because I needed more and more loans to pay my current ones. I came across DebtBusters, who were able to lower my payments so that I can afford to pay my debts every month. I have learnt a valuable lesson at a young age and I am better off because of them. Thank you DebtBusters”. – Erica Manuel, DebtBusters Client
30 August 2018
To many South Africans the term “debt counselling” is seen as some sort of financial curse word. That if spoken, it swallows any hope you have of a healthy credit record. (Which is a complete myth!)
But how did one of the best debt solutions inherit this stigma? And what are the other common myths that may be keeping you from becoming debt-free?
Myth 1: Debt counselling is the last resort and is exclusive to those with really bad debt
Fact: Debt counselling is a positive rehabilitation process and is focused on taking the strain off you. Tens of thousands of people engage with DebtBusters monthly, so you are not alone!
Also, debt counselling is not reserved for the “worst-cases” – simply being over-indebted or needing help to manage your credit rating better is enough reason to seek help and assistance.
If you’ve ever had a creditor threaten legal action against you for failing to meet your repayments you could be a candidate too.
What many people fail to understand is that debt counselling is there to protect you and assist you to ultimately become debt free.
The last resort is actually sequestration and is relevant when you cannot afford debt counselling and will end up costing you far more in the long run.
Myth 2: You must pay a fee upfront
Fact: If this is the case, run!
According to the National Credit Regulator (NCR) debt counselling fees are typically the same for all debt counselling companies and there are no upfront fees.
Although some fees are collected in the first few months of the debt counselling process, they will all be included in your monthly, affordable payment.
All fees included in your repayment plan is what you agree to before the process officially starts. It’s also regulated by law and your debt counselling process is only solidified after a court order has been granted by a Magistrate.
It is important to note that your fees are dependent on the debt owed.
Myth 3: Being under debt counselling means you are ‘black listed’
Fact: When you are under debt counselling you are temporarily prevented from applying for any credit as your profile is flagged at the credit bureau. It is a way to assist consumers to take a breather and focus on getting financial freedom.
Once the process has taken its course you receive an “all clear certificate” which instructs all credit bureaus to update your profile. Once this is done your profile will no longer reflect that you were ever under debt counselling and you will be able to access credit again.
Debt counselling can be daunting because it’s never easy to admit that you need help, especially when it comes to money, but you’d be surprised how more and more people are recognising that is the responsible and wisest step.