Almost 60% of consumers who enter into debt counselling drop out in the first three months, according to research by the National Credit Regulator. It's fair to say that a large segment of these consumers didn't understand what they were getting into.

Here are a few myths that need to be dispelled.

• You don’t have to be over-indebted to get help

The National Credit Act (NCA) says that when a consumer applies to go under debt review, the debt counsellor must determine whether you are over-indebted (your repayments exceed your means) and whether any of your credit agreements need to be declared reckless because you could not afford them when you took them out.

If you are not over-indebted but are struggling, or are likely to struggle, to pay all your creditors on time, the debt counsellor can recommend a debt rearrangement plan or "voluntary debt rearrangement".

If your debt counsellor rearranges your debt, and your creditors agree to it, the National Consumer Tribunal or a magistrate's court must confirm the proposal, which becomes a consent order.

Independent debt counsellor Renee Marais of Pretoria said if you are not over-indebted, your credit report should not reflect that you are in debt counselling. "A consumer who is not yet over-indebted has options: sometimes it is just necessary to get assistance in reorganising and reducing expenses in your budget and no negotiations with your credit providers are necessary.

"If you are merely experiencing a cash-flow problem that can be rectified in a short period of time, one or two of your credit providers may be willing to renegotiate terms to help reduce instalments until your situation is under control."

On the other hand, debt review is a legal process which is not voluntary and limits your options in that it is recorded on your credit report and prohibits you from acquiring more credit.

• You don’t have just five years to settle all your debts

The NCA does not place a limit on how long you can be in debt counselling. Some debt counsellors work out proposals in which all unsecured debt (like personal loans, credit cards and credit agreements with retailers) must be repaid within 60 months. Be careful of such proposals.

Your term under debt review should be determined by how much debt you have and how much money you can afford to pay all your creditors.

The debt counsellor needs to consider the amount you have available after tax, UIF, pension, medical aid, housing, transport, school fees, food, insurance, and other essential expenses have been deducted from your income. That amount - your discretionary income - should be used to repay your credit providers.

"It depends on your personal situation what the amounts are available to pay debt and the term will vary regarding your personal circumstances."

The term does not necessarily have to be 60 months. It can be shorter or longer.

• You don’t have to use a payment distribution agent

You are entitled to pay creditors yourself.

"You may use any method to pay your debt, but if you elect to use a payment distribution agency (PDA), you will have to pay them for their services and it will take longer to repay your debt," Marais said.

• You won’t necessarily get any “counselling”

You might expect a one-on-one consultation and ongoing relationship with a person to help you navigate the legal process, but also to get to grips with your debt problem.

If you approach a big debt counselling firm, you might not have any dealings with an actual debt counsellor.

In terms of the NCA, only a natural person can be registered. A company cannot.

Marais recommends you ask the person for a copy of their registration certificate. Certificates have to be renewed annually and you can check the status on the National Credit Regulator's website: www.ncr.org.za.

A debt counsellor must communicate with you at all times during the process and ensure you are informed every step of the way, Marais said.

The decision as to how your money is disbursed between creditors is always yours and you must have input, she said. "If agreements are negotiated on your behalf, the law requires that you agree and sign them."