Debt affects a sizable section of the South African population, with many individuals and households unable to keep up with their payments. According to a recent Old Mutual Savings and Investment Monitor, 38% of South Africans have debt that exceeds their income and 10% of households have skipped a meal owing to a lack of finances.
These numbers underline the importance of debt counselling in assisting persons in financial hardship to find a way ahead. Debt counselling is a vital process that can help people regain control of their finances through a structured and consolidated repayment plan.
The debt counselling process involves several steps and the length can vary slightly, depending on the severity of the situation. On average, the entire process can take several months, but some clients need a few years to go through the motions and clear their debt.
MSD Consulting is a registered South African debt counselling firm dedicated to assisting citizens in overcoming debt challenges and achieving financial freedom. We have a team of qualified debt counsellors and financial experts who provide personalised debt counselling services tailored to each client’s specific situation.
Understanding debt counselling
Debt counselling entails a competent and certified debt counsellor creating a personalised debt repayment plan that takes the client’s financial condition and goals into account. The process provides various benefits, including protection from legal action by creditors, lower interest rates and consolidation of debts into one manageable payment.
Debt counselling can help anyone who is in debt, even those with a bad credit score, a high debt-to-income ratio, or who have been blacklisted. The process begins with an initial meeting with a debt counsellor to review the financial condition, debts and ambitions of the client. The initial meeting is intended to assess whether debt counselling is a good fit for the client and to identify any potential challenges that may occur during the process.
Clients can also ask any questions they have regarding debt counselling and the procedure at the initial meeting. MSD Consulting is dedicated to offering exceptional customer service and our debt counsellors will take the time to address any issues or questions the client may have.
Assessing the financial situation
A detailed assessment of the client’s financial position is the next step in the procedure. All essential data, including payslips, bank statements and debt statements, must be provided to MSD Consulting. The purpose of this process is to calculate the client’s overall debt, monthly income and costs in order to create a thorough debt repayment plan.
The debt counsellors at MSD Consulting have extensive experience in analysing complex financial data and designing successful debt payback strategies. They will go over all of the client’s data and collaborate with them to design a realistic and long-term plan based on their individual financial position.
The repayment plan will detail the monthly payments required to pay off the outstanding debt over a period of time, often three to seven years. Our debt counsellors will also liaise with creditors to ensure that the client’s obligations are consolidated and interest rates are decreased, making the debt repayment process more manageable.
Getting legal approval for the repayment plan
MSD Consulting will handle all of the legal paperwork needed to make the repayment plan a court order. Debt repayment arrangements must be approved by a licenced debt counsellor before they may be implemented by law. The counsellor will examine the client’s financial condition as well as the proposed repayment plan to ensure that it fits the criteria of the National Credit Regulator.
Depending on the counsellor’s workload and the complexity of the case, the approval process can take up to five working days. Once it has been approved, the courts will issue an order that makes the plan legally binding. This also ensures that creditors do not harass the client, giving them peace of mind while they make the monthly payments.
MSD Consulting will consolidate all of the client’s obligations into one manageable amount. The client must make monthly payments in accordance with the repayment schedule. It’s important to note that the client cannot take on any new debt once this process is underway. They must also cooperate and make timely payments to ensure the repayment plan’s effectiveness.
Completing the debt counselling process
MSD Consulting will monitor the client’s progress and reassess the repayment plan on a regular basis during the process. Circumstances can change and MSD Consulting can review and revise the repayment plan as necessary. Any substantial changes in the client’s financial status should be reported to us.
We will issue a clearing certificate to the customer once the debt repayment plan is completed. The clearance certificate certifies that the client has successfully finished the debt counselling process and has paid off all debts specified in the plan. Having a clearing certificate is a vital step for people who want to rehabilitate their credit after being in debt.
Debt counselling is an effective technique for individuals and families to gain control of their debt and achieve financial independence. Depending on the client’s financial circumstances and the complexity of the case, the debt counselling process can take several months to several years.
If you’re under severe financial pressure and need assistance, don’t hesitate to reach out. Debt counselling will provide you with the knowledge and tools to get on top of your monthly repayments. Our professional counsellors are available to help you. Your journey to a debt-free future starts by contacting us today.
MSD Consulting is a registered debt counselling firm, committed to providing debt relief to all South Africans struggling with their monthly debt obligations. Our team of qualified debt counsellors and financial experts provide personalised debt counselling services tailored to your situation. For more information on debt resolution, follow us on Facebook and Instagram.