Debt counselling has come to the rescue of many over in debt customers in the last 12 months. In the current economic climate many people find that they are over in debt and unable to pay the normal monthly installments to creditors. Price inflation and loss of income has played a large role in the current financial crisis. What has played an even bigger role is the fact that house prices are not increasing like they did in the real estate boom times.

People are finding more difficult these days to consolitate debt, because their houses are not increasing in value as it used to and thus they can not refinance or release equity form their mortgage bonds. Bank lending criteria is very high these days which reduces the opportunity for consolidation or take out cheaper loans.

One of the best options for over in debt customers in these trying times is to apply for debt counselling. It is interesting to see that not many people are aware that there is something like debt counselling to help their debt situation and get debt relief.

Debt counselling or debt review only came into effect in June 2007 with the National Credit Act. The National Credit Regulator or NCA makes sure that all credit providers act in accordance with the act; this includes reckless lending from greedy credit providers.

A person that is finding that they are not making ends meet at the end of each month can apply for debt counselling at a debt counsellor or debt consultant. The debt counsellor will determine if the customer is over in debt and cannot pay creditors their normal installments. The debt counsellor will contact all the customer's creditors and negotiate new terms of payment that the customer can afford to pay each month. A debt counsellor will assess the customer’s budget by looking at the income minus essential expenses like food and transport. The amount that is left after essential expenses is offered to the creditors as payment.

If the creditors don’t except this offer the proposal can be enforced onto creditors by the courts. If the court finds that your creditors lended you money recklessly without checking your financial situation, the court can order the creditors to write off the debt you owe them. The customer will be protected from repossession or any legal action from creditors.

The customer will remain in debt counselling until he has paid off all his debt to creditors or his situation changes for the better and he decides to go out of debt counselling for good.