Debt Counselling –Yay or Nay?

Modern day life is very expensive and one can easily find themselves in way over their head, and I mean waaaay over. A small overdraft here, emergency credit card there, clothing account, cell phone contract – the list is endless. All of these things accumulate and, before you know it, your income is lower than your expenses and you cannot afford to meet your monthly instalments. Next thing you’re in arrears – arrears that accumulate interest. And then you’re “handed over”….

What happens now? What do you say to the lady from “collections department at XYZ”? Fortunately (or unfortunately), the National Credit Act recognizes how many South Africans are struggling to manage their debt and there is an option – Debt Counselling.

The National Debt Mediation Association of South Africa defines debt counselling as “a formal legal process that provides for a consumer to be declared over indebted and for the Debt Counsellor to negotiate a restructured payment plan and obtain a court order confirming the new repayment plan.”

(Btw, please check out for a detailed explanation of debt counselling works – very informative )

Ok, that is a loaded definition, let’s break it down. Basically, if you reach a point where you are unable to repay all your various debt or credit facilities and your income does not equal or exceed the total amount of those debt obligations, you are classified as over-indebted. The law provides that, should you find yourself in such a situation, you have the option to seek assistance from a debt counsellor. Debt counsellors act on your behalf to negotiate more favourable payment terms with all your various creditors, allowing you to be able to meet your daily expenses whilst making your debt repayments.

Sounds like a sweet deal, right? Well, not exactly. Here are a few things to consider before you decide to go under debt review:

  1. You will be blacklisted – until such time that all your individual debtors have been paid in full, your credit record will reflect that you are under review and not eligible for any further credit.
  2. Debt counsellors are on your payroll too – apart from administering payments to all your debtors, parts of your monthly (reduced) installments include a service fee to the counsellors, every single month, until your debts are repaid.
  3. Prolonging the pain – although debt counsellors ease the burden of your monthly expenses, it will take you longer to settle the outstanding amounts (all the while accumulating interest & with a negative credit record).

Should you decide that debt counselling is for you, consider Zeeva, a Professional Debt Review/Debt Counselling Company for Women. Based in South Africa and Registered With the NCR, Zeeva is an all-women team of qualified debt specialists, each with a specific field of expertise to (1) ensure your program suits your needs, (2) sort out all the admin and (3) provide you with guidance and feedback throughout the program.

Go ahead and check them out HERE or even HERE😉


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