What does Debt Counselling entail and what is the NCA and NCR ?

By: Debt or Alive Registered Debt Counsellors NCRDC2017  06-30-2011
Keywords: debt, Debt Counselling, debt counsellors

What is Debt Counselling ?
The Debt Cousellor:
A consumer can seek the assistance of a debt counsellor on his/her own accord or can be referred to one by a court or by the National Credit Regulator.
Main purpose of a Debt Counsellor:
» To act as a mediator between credit providers and indebted consumers.
» To assess a Consumers state of indebtedness.
» To make recommendations to Credit Providers and/or Magistrates Court on behalf of over indebted consumers.
» To facilitate debt re-arrangement with Credit Providers

How can a Debt Counsellor help you? Making a proposal, on your behalf to all your Credit Providers on how your debt repayments can be structured in order to achieve a manageable level based on your income and expenditure. Referring matters to the Magistrates Court when Credit Providers are not prepared to accept the Debt Counsellors proposal, ensuring via Court Order that the Credit Provider acts appropriately. Advising Credit Bureau's to list you as having applied for debt review thereby ensuring that judgement is not taken against you in respect of current indebtedness provided that you adhere to your repayment arrangements.

Is Debt Couselling for you ?
It’s extremely easy to use credit cards beyond your ability to pay for the debt, especially when credit card companies are charging high interest rates on the amount you owe. If you happen to make a late payment, then you’ll be paying even more with late fees on top of your monthly payments and interest. When your debt gets out of control, many people start looking for options to improve their financial situations. With so many choices, including debt consolidation loans, self debt reduction, debt management plans, debt counseling services and even bankruptcy, it can be overwhelming and confusing to figure out what is your best option for the fastest repayment of your debt. Debt consolidation is more than just a debt consolidation loan. Other forms of consolidating debt includes some forms of debt counseling, and balance transfers so it’s important to weigh your options carefully in order to find the solution that will work best for your unique financial situation.

Debt Counseling Debt Consolidation
Many credit counseling programs provide debt management programs that allow you to make a single monthly payment each month. While they don’t actually pay off your debt into a single loan, as the consumer you are making a single monthly payment to the credit counseling agency (who then pays your creditors on your behalf), so it is very similar to paying off debts with a debt consolidation loan as far as your monthly payments are concerned.
Balance Transfers
 If you have a handful of credit cards with high interest rates, sometimes it can be beneficial to consolidate them by moving them all to a lower interest rate credit card. Just be sure to pay attention to the promotional offers with the lower interest rate credit cards - to make sure that you have a long period of time of low (or even no) interest. Also be sure to check to see what your interest rates will be once the promotional period ends, to make sure it isn’t going to jump sky high after a few months. This is a debt consolidation procedure that should only be used occasionally to make it easier to pay off a few credit cards; and is not advisable to be used repeatedly or for individuals with excessive monthly debt.
Debt Consolidation Loans 
In most cases, individuals who have several credit card accounts and/or unsecured loans can benefit greatly from obtaining a new loan that is large enough to pay off each of the smaller accounts. The debt consolidation loan can either be another unsecured loan from the bank or a secured loan if you own a home or vehicle. Using secured loans is always a little risky because if you are unable to make the payments the loan provider can take your collateral (your home or your car, for instance), so consider this option carefully before signing the papers!
How to Choose a Debt Consolidation Option
The most important aspect to consider when trying to decide whether to consolidate your debts is whether or not the new monthly payment for the consolidation is going to save you money on your monthly budget for expenses, and whether or not it is going to save you from paying interest and fees over the long term. In most cases, a debt consolidation (whether you decide to get a loan, use a balance transfer or a debt management company) is going to save you money over the long term and help you pay off your debts faster.
The Purpose Of The National Credit Act (NCA): The National Credit Act is an act that became effective in law in June 2007 to promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information; to promote black economic empowerment and ownership within the consumer credit industry; to prohibit certain unfair credit and credit-marketing practices; to promote responsible credit granting and use and for that purpose to prohibit reckless credit granting; to provide for debt re-organisation in cases of over-indebtedness; to regulate credit information; to provide for registration of credit bureaux, credit providers and debt counselling services; to establish national norms and standards relating to consumer credit; to promote a consistent enforcement framework relating to consumer credit; to establish the National Credit Regulator and the National Consumer Tribunal, to repeal the Usury Act, 1968 and the Credit Agreements Act, 1980; and to provide for related incidental matters.

The National Credit Act is there to protect Consumers rights by :
» Controlling the Cost of Credit
» Preventing consumers over committing themselves financially
» Preventing reckless credit practices
» Preventing exploitation by Credit Providers and Debt Collectors
» Assistance to consumers who are OVER COMMITTED FINANCIALLY.  

Who Is The National Credit Regulator (NCR):
The NCR was established as the regulator under the National Credit Act No. 34 of 2005 (The Act) and is responsible for the regulation of the South African credit industry. It is tasked with carrying out education, research, policy development, registration of industry participants, investigation of complaints, and ensuring the enforcement of the Act

Keywords: debt, Debt Counselling, debt counsellors, debt relief

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