In the troubling financial times we find ourselves in, many Consumers are increasingly becoming over-indebted.

Broadly a Consumer will be over-indebted if his income is insufficient to adequately provide for himself or his family and to service his debt obligations.

There are obviously varying degrees of over-indebtedness and, most certainly, many Consumers will be able to manage their debt by developing and adhering to a strict monthly budget.

Thereagainst many Consumers, if not the majority, are so overwhelmed by there debt, that they cannot address it by the mere introduction of a budgetary regime. This category of Consumer comes from all walks of life and income groups. The fact is, debt respects no class.

Unfortunately, many over-indebted Consumers, in the erroneous belief that they are powerless to address their burden of debt, often ignore same and go into a state of denial with regard thereto. Others allow considerations of pride or embarrassment to prevent them from seeking and obtaining debt relief.

MANY consumers are drowning in debt due to the economic crisis sweeping the country.

The rising cost of living is compounding the economic woes of already over-indebted consumers, who simply can no longer afford their debt or adequately provide for their families.

To a large degree, the problem was brought about by consumers who, during the good times, over-exposed themselves to credit and which creditors were all too eager to provide.

No-one, however, anticipated the economic downturn and consumers are left to their own devices to survive the situation.

Consumers consequently often find themselves in a state of hopelessness which negatively impacts on the wellbeing of both the family unit and communities.

Instances of depression, family violence and substance abuse increases accordingly and, in extreme circumstances, even suicide.

The workplace is also not immune to the effects of the economic crisis in that it leads to a lack of productivity and absenteeism.

According to the National Credit Regulator, there are more than 17 million consumers in South Africa who are in arrear with their debt obligations.

This is a staggering statistic and indicative of over indebted consumers being in urgent need of debt relief.

The National Credit Act provides for a process in terms whereof over-indebted consumers can apply to a debt counsellor for debt relief (the debt review process).

A debt counsellor will consider, evaluate and review an over-indebted consumer’s financial obligations and develop a payment plan in terms whereof such consumer’s debt obligations are re-structured and reduced to affordable amounts. Thereafter a debt counsellor will cause the payment plan he would have developed, to be converted to an order of court and to which all the consumer’s creditors will be bound. In short, a consumer will, with due regard to his income and required living expenses, only pay his creditors what he realistically can afford to pay.