South Africa is relatively new the idea of debt services, as The National Credit Act only came into effect in 2007. Since then many people have capitalised on this fact, and debt counselling has become a fast growing industry.
In South Africa debt counselling is now the number one debt service for consumers who are in a position where they can no longer manage their debts effectively. Debt counselling is regulated by The National Credit Regulator and they keep an eye on individuals who offer credit services to consumers. Debt counselling is designed to help a consumer pay off debts at a rate and pace that they can keep up with and that is within their means.
There also exist other debt services such as debt consolidation, and many companies specialise in loans that are used to pay off debts. These differ from micro loans and payday loans in that they have low interest rates and are paid off over a longer period of time.
There are also debt service institutions that protect consumers against unfair credit practices. One of these is the Credit Ombudsman. This service allows consumer to bring unfair credit practices to their attention, and aim to resolve instances where a creditor has crossed the line or is not operating within the letter of the law.
South Africa is slowly creating a system that makes the consumer the priority and as it continuous to do so more debt services will become available. However at present the most effective debt service in the country is debt counselling and it will continue to dominate for many years to come.
Article written by: Andrea van Tonder 04-2013