FINANCIAL consultants have advised consumers as to how they can best avoid having to seek debt counselling in 2010 – as they face fresh bills and debt incurred over the festive season.

After a dramatic increase among Eastern and Southern Cape residents seeking help for indebtedness after the holidays, debt counsellors have already been encouraging consumers to take preventative measures to keep them out of this predicament come the year-end 2010 season.

Consumers have been showing up in hoards at debt counsellors’ offices in the regions during the first two weeks of this year, seeking help after overspending during the season with some offices seeing an increase in inquiries of up to 20%.

Counsellors however agree that all this can be averted with the right financial attitude and decent planning.

Jorgen Rosvall from Debt Therapy – which has offices nationwide including Port Elizabeth and East London – said there was usually a surge in debt counselling after the festive season – generally between 10 and 20% more than in a normal month.

“The increased demand for debt counselling services at the beginning of the year is due to overspending at the end of the year and around the festive season. Personal debt increases in similar proportions to the increased sales that the retail industry experiences during this period. Many people who are already experiencing problems with debt often get even further indebted during this period, which then will result in a situation that is unsustainable,” said Rosvall.

He added that having to now in January suddenly pay school and other fees added more pressure.

Rosvall said however there were solutions to such problems. “Talking to suppliers, such as schools, and asking for a monthly payment plan instead can be a good solution if cash is tight.”

He added the whole situation could be prevented by implementing some simple measures throughout the year.

“Making a budget and planning expenses throughout the year will enable people to manage their finances better. One idea is setting aside some cash for the festive season at the end of the year which is when people will overspend – this way you can ‘overspend’ with a clear conscience.”

IT lecturer Marlon Parker, of the Cape Peninsula University of Technology, who has developed an innovative cellphone service called Debt Breaker, said since their offices opened earlier this month they too have had an influx of queries and requests from over-indebted clients.

“On average since being back we could have 18 interactions a day,” said Parker. Monique Theron from JJeRR Counselling and Consulting Services – a debt counselling company affiliated with Debt Breaker – said the reason for this was that most people went on a “payment holiday”. “To enjoy the festive break they would ignore the fact that creditors need to be paid, not taking into consideration that regulation of the (National Credit) Act gives power back to the creditor to terminate the debt review process if they do not stick to the process,” said Theron

She said in order to enjoy the next festive season debt-free, consumers should plan ahead.

“People should learn to budget and ensure they keep to their financial commitments.

“Of course try to use cash instead of buying everything on credit.”

She added that if a consumer knew that he or she was about to face a problem, they should speak to their creditors and make them aware or seek advice from debt counsellors. “Don’t wait until it is too late.”

Heidi Moynihan, marketing manager of Debt Restructuring Services (DRS) which has offices around the country including the Eastern Cape and on the Garden Route, said they had seen a 40% increase in consumers seeking help after the past festive season compared to the same time last year. Therefore she believed it was of utmost importance that consumers start now to ensure their financial well-being after the next festive season.

“I think the reason for this is that although the recession was technically over, consumers still felt the effects. Many people also didn’t get the bonuses they bargained on.”