Become Pro-Active About Your Debt
I have made this article much bigger – in words, because I am leaving out the KNOW YOUR DEBT RIGHTS article. I think that that one will fit in much better with next months FINANCIAL LAW topic
Become pro-active about your debt – Die Son
Like everything in life, things definitely start looking up once you make the effort to do something about the problem! So, here are a few guidelines in dealing with your finances.
Know your financial status
Know who your creditors are. Know the balances owing on your home, vehicle,cards etc. Know what your installments are and what interest rates you are paying. Go to the banks and shops and get this information. As a consumer, you have the right to it!
Do not ignore your debt
You can do what you like. Your debt will not automatically disappear. Not opening the envelopes or not fetching the registered mail from the post office – does not mean the letters of demand are not there. Deal with it!
By not opening the letters, you could be missing something important
Like an important notice from the bank called a SECTION 129. This is basically the creditor notifying you of pending legal action. It normally states that you have 10 working days to make arrangements with your account or make use of your right to see a debt counsellor, who can assist you with your debt situation. NOW IF YOU DON’T OPEN THE LETTERS and miss this………..YOU WILL be handed over to attorneys, which will mean huge legal costs for you – possibly also leading to summons being served and judgment being taken. Simply because you didn’t open the letters.
Get out of denial
If your expenses are exceeding your income – or the largest part of your income is going towards servicing your debt, THEN YOU ARE IN TROUBLE. Admit it! This is often the hardest part of the process.
Draw up a budget
Draw up a list of your income and expenses. List the necessities and the luxury items. Be honest with yourself when doing this. Its no use trying to make a situation look better than what it really is.
Avoid borrowing even more to pay off existing debt
This is a common mistake many people make. If you cant afford your existing repayments – you are not going to be able to afford an additional one!
Become pro – active about your debt and do something about it
DO NOT LEAVE THINGS UNTIL IT IS TOO LATE! If you are missing payment or you even just feel that you are going to….. Go and see your creditors. Exercise your right to see a registered debt counsellor. The National Credit Act No. 34 of 2005 was passed into law by parliament and offers the over indebted consumer the protection of any further legal action by creditors. A registered debt counsellor can also negotiate for much lower repayments to creditors.
Consumes should realize that they are not alone in this sea of financial despair. There ARE structures and mechanisms in place to help you cope, get your finances in order……and start anew.