How to Know if You Need Debt Counselling

How to Know if You Need Debt Counselling

If you are over-indebted then you might find debt relief through the process of debt counselling, which creates an affordable repayment plan to repay outstanding debt.


You are generally considered to be over-indebted if you struggle with making debt repayments on time or if more than half of your income goes towards paying debt.

With debt counselling, a debt counsellor will measure your expenses and liabilities against your income in order to determine how indebted you are. If your expenses and liabilities are more than your income, then you are over-indebted.

You will need to hand over certain information to your debt counsellor, who will then inform the credit bureaus that are you are under debt counselling and will stop creditors from contacting you. The debt counsellor will then negotiate with creditors on your behalf for lower interest rates and extended payment terms.

You will then only need to pay one reduced monthly instalment towards your debt according to your debt repayment plan.

But how do you know if you need help in managing your debt? Here is how you know that you need debt counselling.

Keep reading and let’s find out if you are over-indebted…

Your Monthly Expenses Are Paid on Credit

If you are using lines of credit like a payday loan, credit card or store cards to pay for your basic monthly expenses like petrol or food then you may be in over your head. It will only be a matter of time before you max out your credit, which will result in hefty damage to your credit record.

You Don’t Have Any Savings

You may want to save, but find that it is almost impossible because your debt repayments are just too high. There is a difference though between having no savings and being unable to save. If you have no savings, then this could be due to poor financial management. If you are unable to save because you do not have the funds to then you could be over-indebted. If you don’t have any money to save and everything is going towards debt and other expenses, then you may need to seek help.

You Are Paying Debt with Debt

If you are borrowing money from family and friends, taking out payday loans, using your overdraft to settle accounts and so on then you are not financially healthy. If you are already not able to afford your debt, then you are just making the situation worse and driving yourself deeper into debt. You will be trapped in a cycle of debt.

Just a couple more signs…

You Can’t Sleep

Being financially stressed is terrible and will eat at you, which will cause sleepless nights, which will then affect you during the day at work etc. This can easily lead to depression and other health issues.

You’re Not On Top

It can be tiring trying to play catch up with your repayments. You may think that skipping one payment isn’t too bad but as soon as you miss one, it means that you have double to pay the next time and so on. You will just have more pressure on you the month after and your situation is not going to get better.

If you can relate to any of the above, then you may need to seek help with your debt through a debt counsellor. Ignoring your debt will not make it go away and the first thing that you need to do is face it and accept that you do need help. Taking the first step in getting help will mean that you are on the right path to leading a debt-free life and could soon say goodbye to your debt troubles.