Even debt counsellors
need a little financial help.
Four debt counsellors
have been deregistered for contravening the National Credit Act for not handing money they collected from consumers under debt review over to credit providers.
One of them even borrowed money from his debt
And while debt counselling
can help you hold on to your assets, it still doesn’t “address the underlying problem about the sometimes reckless [spending from] which South Africans incur debt
,” adds Neil Roets, CEO of national debt counselling
firm Debt Rescue on the SowetanLive
But how do you know if you really do have a problem with reckless spending?
Chronic or reckless spending is an addiction, says Karin Iten of FSPInvest.
And if you suffer from one or more of these ‘symptoms’, you’re in danger of being overwhelmed by debt
Four signs you’re in danger of being overwhelmed by debt from your reckless spending
You continually overspend your budget and use your credit card limit to get you through to the end of the month.
You're always borrowing money to make it to your next payday.
You use this month’s salary to pay off last month’s debts.
Your repayments only ever cover the interest charges on your account, but never manage to reduce the actual amount.
It gets worse. Pawn brokers are reporting record business from indebted individuals pawning everything from vehicles to flat screen TVs, confirms the SowetanLive.
But it’s not just you.
Many retailers encourage consumers to incur debt
that that they know they can’t afford to repay.
Here’s how the National Credit Act can help you get out of debt
When it comes to debt
, “ the National Credit Act… comes into good stead. If it can be proven in court that a credit grantor extended credit recklessly, that debt can be cancelled by the court,” assures Roets.
If you’re in danger of being overwhelmed by debt
, Roets suggests you ask your debt
counsellor about the in duplum rule, as it “prevents outstanding debts
from accumulating to many times the original figure as was the case in the past”.
Check if you’re in danger of being overwhelmed by debt
. If so, consult a registered debt counsellor
immediately to start the debt
review process and you’ll soon be on more stable financial ground.