We chatted with Hein van Vuuren, from National Credit Revolution, on the topic of debt counselling. As personal and business debt has sky rocketed over the past two decades in South Africa we aim to find out how the NCA and other initiatives are helping entrepreneurs and business people to challenge this rising problem.
On 1 June 2007 the National Credit Act (NCA) came into effect. The NCA empowered over-indebted consumers by allowing them to apply for debt counselling.
Why was debt counselling introduced, and why is it so important?
Debt counselling was introduced to provide a definite process for helping a customer with over indebtedness. The process provides a consistent system of debt restructuring, enforcement and judgement, which places priority on the eventual satisfaction of all responsibilities for the consumer’s obligations under the credit agreements.
Tell us about the process behind debt counselling.
The process of debt counselling was developed to offer an option for consumers who cannot meet their monthly obligations under current credit agreements. Their available amount for debt repayments is calculated after all basic living expenses have been budgeted for. Basic living expenses get priority before making provision for credit repayments. Debt counselling provides you with more breathing space without getting into trouble with your creditors for paying less than the original instalments.
How would you summarise debt counselling to our Ideate readers?
Debt counselling can be summarised as a procedure where a person, who can no longer afford to meet all his monthly debt obligations, can apply with a debt counsellor to negotiate on his behalf with his creditors for reduced monthly repayments.
Thanks Hein – Ideate readers, please take care out there. Talk to your suppliers, have good processes in place for getting payments in, and watch your cash flow! If you’re in trouble, give Hein a call at 087 802 5761 or email him at hein [at] ncrdebtcounsellor.co.za