FINANCIAL FITNESS BY JESSIE TAYLOR
Tips on debt management Debt counselling: Helping South Africans find financial stability
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aced with rising interest rates and high inflation, many South Africans are seeking help to manage their growing debt burden. One of the options, which is provided by law to protect consumers, is debt counselling. This has become increasingly popular among overly indebted South Africans to help achieve financial stability.
He added that debt counselling has proven an effective process, with the number of people successfully completing debt counselling having increased ninefold since 2016.
Consumers spend on debt repayments. South African consumers are spending a significant amount of their take-home pay to service debt each month, according to DebtBusters’ Q1 2023 Debt Index.
Debt counselling is one of the debt relief measures provided for in the National Credit Act, which intends to assist over-indebted consumers struggling with debt. It offers budget advice, negotiation with credit providers for reduced payments and restructuring of debts
“Before applying for debt counselling, on average, consumers were spending 65% of their take-home pay to service debt,” said Benay Sager, Head of DebtBusters.
Consumers struggling to meet their monthly debt obligations qualify to apply for debt counselling if they have a distributable that can be used to offer reduced payments to their credit providers.
56 | Public Sector Leaders | August 2023
