You qualify to apply for debt counselling if you have a fixed income and not being able to repay all of your debt (resulting from credit agreements) on time. This process involves a debt counsellor (DebtHealth to your service!) to submit an application to the National Credit Regulator (NCR) on behalf of the client (which of course is you!). During the next step DebtHealth negotiates with all of your creditors with the main purpose to lower both interest rates and monthly payments.
“To start this process we need some of your financial information, including your income and biggest expenses, e.g. loans (home, vehicle and personal), overdrafts and creditors,” says Martheli Kruger, lawyer at DebtHealth. “We also calculate your monthly living expenses to ensure that the new amount payable after negotiations is indeed feasible. The calculated amount is then paid monthly and distributed to your creditors. If you keep to the agreement and pay the negotiated amount on time, you can look forward to a debt-free life again.”
DebtHealth’s debt counselling guru, Drini Oosthuizen, explains that the client can now calculate an estimated repayment amount using the newly-designed DebtHealth calculator. “This calculator enables the client to determine the approximate savings that can be achieved per creditor with debt counselling. All you need to do is complete your income and expenses one by one.”
There are a few things that you need to take into consideration when completing the calculator:
Home loans – you need to repay 80% of the contractual (original) instalment.
Vehicle loans – you need to repay 70% of your contractual instalment.
Items like personal loans, overdrafts and creditors need to be repaid within 60 months. See the following example as explanation:
| Type of loan | Contractual instalments | New payment | Savings* |
| Home loan | R15 953 | R12 762 | R3 191 |
| 80% of the contractual instalment | |||
| Vehicle | R4 964,10 | R3 475 | R1 489 |
| 70% of the contractual instalment | |||
| Personal loan | R2 906,15 | R820 | R2 086 |
| Payable within 60 months | |||
| Credit card | R2 800 | R 681 | R2 119 |
| Payable within 60 months |
*The calculation is subject to change. The aftercare fees and distribution fees as regulated by the National Credit Regulator are excluded from the calculations.
“Applying for debt counselling is not an overnight process, but with a little bit of patience and perseverance it gives you a chance to get back control over your finances and look the world straight in the eye again,” Kruger concludes.
If you want to know more about debt counselling, contact DebtHealth at 060 366 7889, send an email to clientcare@dhsa.co.za or visit our website.