What is debt counselling? If you thought debt counselling is about getting a holiday from your payments, you have it wrong. Debt Counselling is about making arrangements with your current creditors to make an arrange with payment.

So what does debt counselling entail? There are three main areas. These areas cover the process of debt counselling. They are:

• Your budget planned for you - what is reasonable to budget for taking your current position into consideration. This includes your life style and daily living expenses.
• Consolidating your debt - putting your debt into one manageable bundle enabling easier payment of the debt.
• Negotiating with your creditors - having discussions with your current creditors on making an arrangement (plan) for paying back the monies owned.

This Debt Counselling process was put in place under the National Credit Act. This act is designed to limit reckless lending and prevents people from becoming over indebted. You become over indebted when you borrow more than what you are able to pay back. Servicing your debt can become an issue when you have to much debt due to reckless lending. The National Credit Act aims to prevent this reckless lending.

Debt counselling is a method for an individual to take control of his or her financial situation. The person is over indebted and needs guidance on resolving the issue. This is done with the debt counselling process where the individuals budget is looked at, the debt is consolidated and the creditors are negotiated with on your behalf.

Debt Counsellors may approach the courts to assist people who are indebted to creditors to accept a new payment plan. However, the courts are behind and this will take time to resolve. With the help of a Debt Counsellor you are able to protect your assets legally. Do not wait, rather apply for debt counselling instead of losing your house, car or other valuable assets due to being in debt.