DEBT counselling is an enormously beneficial process for couples who are struggling with debt or are on the brink of not meeting their financial commitments. Freepik
Couples who are married in community of property should understand their joint financial situation and know exactly how much debt both partners have taken on, says Vera Nagtegaal, the executive head of online comparison website Hippo.co.za.

Nagtegaal says financial problems related to debt are a shared challenge for these couples.

“Any couple, but specifically those married in community of property, should have a joint understanding of their financial situation, and that includes knowing exactly how much debt has been taken on, as well as how it’s being paid back,” says Nagtegaal.

If a couple are over-indebted, they should consider a joint debt counselling application, she says.

Nagtegaal says debt counselling is a regulated process in which a debt counsellor helps an over-indebted consumer to develop and negotiate a restructured debt repayment plan.

“The counsellor will then obtain a court order, should they qualify, for the applicant that confirms the payment plan, and then deals with the creditors on their behalf to have their credit agreements extended and the instalments reduced.

“Once the court order is in place and the creditors have been informed, they may no longer contact the indebted couple demanding repayment. All communication must now be channelled through the debt counsellor.

“The renegotiated debt repayments will be paid in total to the debt counsellor, who will then pay it to the various creditors.

“While going through the debt counselling process, the couple may not apply for further debt, and the fact that they are under debt counselling will be listed on their credit record.

“When they have settled all their debts, they will be issued with a clearance certificate, and the debt counselling note will be removed from their credit record,” says Nagtegaal.

She says the process is not free, although fees are regulated by the National Credit Regulator.

Nagtegaal says most of the cost is the debt counsellor’s fee. Quotes should be obtained from various debt counsellors so the couple can compare them and decide which offer is best.

Amelia de Milander, the marketing manager at debt management firm DebtBusters, says everyone is under more financial strain.

“We have experienced up to 30 percent more enquiries from consumers in the last six months at DebtBusters, and our stats confirm it is not only married couples, but also single consumers (male and female) who are feeling the strain and who need to get assistance with managing their debt.

“For those couples married in community of property, it is, however, a bit more complicated to go onto debt counselling, as they need to both sign up and cannot do it without their spouse’s consent.

"Although it does entail a bit more admin, these couples can be assisted and we have thousands of happy clients that are married in community of property and who managed to get debt free through the debt counselling process,” she says.

De Milander says if you are married with an ante-nuptial contract drawn up, you can enter the debt counselling process without your spouse’s consent and co-signature.

“What DebtBusters’ stats show us every month and quarter when we analyse it, is that to be over-indebted and to experience financial strain does not only happen to a certain demographic, age group or marriage status. There are 13 million consumers in South Africa who are either in arrears with one or two credit agreements already and who can benefit from a debt management solution,” says De Milander.

Nagtegaal says that while an unemployed person may not apply for debt counselling, if one person of a couple married in community of property is employed and can cover the debts, their application may be successful.

“Debt counselling is an enormously beneficial process for couples who are struggling with debt or are on the brink of not meeting their financial commitments.

“It is advisable to have an honest discussion with your partner and to commit to the process at this stage, rather than when the situation is completely out of control and there is the risk of your application being denied.

“While debt counselling might be a challenging process to go through, the benefits of ultimately being debt free are worth the scrutiny and paperwork. If you’re in financial trouble, joint debt counselling could be the best solution,” says Nagtegaal.

PERSONAL FINANCE