Debt is not for the faint hearted. Being stuck in a situation where you feel helpless can be incredibly stressful.
Choosing the right debt counsellor can make all the difference in turning your financial situation around. With our cost of living constantly rising, it’s more important than ever to make well informed financial decisions. Especially when choosing who to trust with your financial obligations.
8 Red flags to watch for when choosing a debt counsellor:
1) Lack of NCR Accreditation
The South African Debt Counselling industry is regulated by the National Credit Regulator (NCR). However, not all debt counsellors adhere to these regulations. Without the proper accreditation, you risk working with someone who lacks the necessary knowledge and ethical standards to assist you with your debt.
Trust Debt Rescue: Debt Rescue is registered with the NCR, ensuring that you receive professional, ethical, and effective debt counselling services. Trust us to help you successfully manage your financial challenges with confidence and integrity.
2) Charges for the Initial Assessment
Before you agree to enter the debt review process, ensure that all your monthly expenses are included in your budget. If the debt counsellor asks for payment or connects an obligation to sign on after the initial assessment, walk away immediately.
Trust Debt Rescue: Debt Rescue provides an initial assessment without any hidden costs or obligations, ensuring that you understand the process and costs upfront. Get your free no obligation assessment here.
3) Hidden Fees
Debt counsellors do charge for their services. Typically, you might encounter an application fee, a restructuring fee, monthly administration fees as well as legal fees depending on whether you apply for a single or joint application.
It’s really important to be aware of these costs from the beginning and to make sure they are fair and within the legal limits established by the National Credit Regulator (NCR).
Trust Debt Rescue: At Debt Rescue, we prioritise honesty and transparency, providing you with a detailed and clear explanation of all fees involved. Trust us to guide you through your journey without any hidden surprises.
4) Minimal Financial Statements Requested
When you’re considering debt review, one important red flag to be aware of is if a debt counselling service asks for only minimal financial statements. Legitimate debt review processes typically need a thorough understanding of your financial situation.
Trust Debt Rescue: Debt Rescue conducts a comprehensive review of your financial situation, ensuring a repayment plan that addresses all your needs effectively.
We will ask you to provide detailed documents such as:
- Proof of Income: This includes salary slips, investment income, and any other sources of revenue.
- Monthly Expenses: This will include your utilities, groceries, transportation, and other regular costs.
- Debt Records: All your debts, like credit card statements, home loans, vehicle payments and other financial obligations.
5) Unmanageable Repayment Plans
Each individual’s financial situation is unique, and a “one-size-fits-all” approach simply doesn’t suffice. The wrong debt counsellor might offer you a plan that fails to address your specific financial needs, resulting in unmanageable repayment terms that you cannot afford.
Trust Debt Rescue: At Debt Rescue, we tailor our debt counselling services to fit your unique financial circumstances, ensuring that your repayment plan is realistic, manageable, and effective. Trust us to create a customised solution that works for you.
6) Lack of Communication and Support
The Debt Counselling Process can be stressful, and you need support and guidance. A debt counsellor without accreditation might leave you in the dark, failing to communicate and support you through this process. This could lead to missed payments, which can leave you in a worse position than before.
Trust Debt Rescue: Debt Rescue offers ongoing support and clear communication throughout the debt review process. We ensure you are fully informed, assist in adjusting payments if your situation changes, and help you stay on track.
7) Lack of Negotiation with Creditors
When dealing with overwhelming debt, a crucial step in regaining financial stability is your debt counsellor negotiating with your creditors. Unfortunately, some debt counsellors may overlook this vital process. The lack of negotiation with creditors can lead to several negative consequences including:
- High Interest and Fees: Debts continue to accumulate high interest rates and fees, increasing the overall amount owed.
- Collection Actions: Creditors are more likely to pursue aggressive actions, such as lawsuits and repossession of assets.
- Credit Score Damage: Missed payments and defaults without negotiation severely harm your credit score.
Trust Debt Rescue: Debt Rescue actively negotiates with your creditors to secure the best possible repayment terms, keeping you informed every step of the way.
8) Poor Support and Guidance
Debt Counsellors that fail to provide regular updates or are unresponsive to client inquiries can leave you in the dark about your financial status and progress. This lack of communication can cause confusion and stress, making it challenging to stay on track with your debt repayment plan.
Trust Debt Rescue: Debt Rescue provides continuous support and guidance, ensuring you have the help you need to manage your debt effectively and reduce financial stress.
Important factors to remember when choosing a Debt Counsellor:
- Always choose a registered debt counsellor with the NCR.
- Ask for recommendations or referrals or go view their online reviews.
- Make sure you fully understand all the fees regarding your debt review repayment plan.
- Your repayment plan must be created specifically to your financial needs and goals.
Take your time and do your research!
Debt Rescue has been helping you pay what you can afford for over 16 years, and has helped thousands of South Africans just like you become debt free. We offer comprehensive debt review services that will not only get you out of your debt, but will give you the opportunity to regain control over your finances. Contact us today for a free, no obligation assessment!
How can we help you?
Are you struggling with your financial obligations while earning an income? If so, let our expert debt counsellors provide a no-obligation, cost-free assessment to consolidate and reduce your monthly repayments for immediate financial relief.
Contact us to speak with our expert counsellors and start your journey toward financial freedom.
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