Can I go under debt counselling if I am unemployed?

20 May 2019

Debt counselling is a formal and highly regulated debt management solution offered to those who are over-indebted to assist them with paying off their outstanding debt, while freeing up cash flow and providing them with legal protection. But is this solution available to you if you are unemployed?

While DebtBusters is committed to assisting all South African consumers with their debt load, there are requirements that need to be met to qualify for debt counselling. These are stipulated by the National Credit Act and among others include that consumers must currently be employed or receiving a sufficient consistent source of monthly income.

When you apply for debt counselling, your debt counsellor approaches your various creditors to negotiate a manageable repayment plan. This process involves your debt counsellor negotiating for a cheaper interest rate and extended repayment terms, which means you pay less.

Once this agreement is in place, your only role is to ensure that payment is made monthly. However, if you are unemployed there is no guarantee that you can afford payments and the process will not work effectively.

Creditors especially want the surety that you will be able to afford instalments and actively pay off your debt.

But should you be able to provide surety that you are receiving a sufficient and steady stream of income, despite being unemployed, which is enough to cover your debt repayments you may still qualify. This income may be funded by maintenance payments, government grants, or an allowance.

If you find yourself in this boat your best bet would be to obtain a police affidavit that documents this stream of income. DebtBusters also advises that you ensure that this money will be available to you at least for the next five years.

There may also be a silver lining for unemployed South Africans who are married in community of property and have a spouse that is employed. Having an earning spouse could help you qualify for a joint application, meaning you will have to declare your spouse’s income upon inception as surety.

At inception you as the applicant are typically required to provide details that range from your South African ID and banking details to proof of income through your latest payslips or income statement, and three to six months bank statements.

At DebtBusters we are eager to help you start paying off your debt in the most manageable and affordable way possible. Our trained debt counsellors are dedicated to making the process a seamless and comfortable one for you and your pocket.

We take on the responsibility of managing your creditors, and we want to ensure that you are able to meet your debt commitments. The first step is confirming you can stick to the agreement and can afford the regular monthly payments.

If you’re over-indebted, and looking for a safe way out of financial stress, contact DebtBusters for a free debt assessment today.

Also read: How do I eradicate debt, accumulated as a result of job loss?