What to Expect From Debt Counselling Service
Are you drowning in debt? You are not alone. Most people in South Africa are struggling with debt.
Fortunately, you can take control of your finances and your life with professional debt counselling.
Debt Counselling 101
Debt counselling is a formal process that empowers individuals to come out of debt. It involves settling debt with creditors through registered, certified debt counsellors.
Not everyone can qualify for debt counselling though. Only over-indebted individuals can obtain the service.
By definition, an over-indebted individual is someone whose monthly expenses exceed their income, which is why they are unable to repay their monthly debt interest.
A debt counsellor will carry out a complete assessment of an individual’s state of indebtedness. If they are over-indebted then a debt counsellor can help them figure out a realistic repayment plan. The counsellor will also renegotiate repayment terms and conditions with creditors so that individuals can pay lower interest each month.
Debt Counselling: Objectives And Goals
The main objective of debt counselling service is to settle your excessively high debt level. With debt counselling, you can also get a clearer picture of your debt situation and your financial circumstances (monthly spending, how much money you save, etc.) and a result-oriented debt remedy that suits your financial needs and goals.
If high debt has taken a toll on your life, debt counsellors can help you move on with your life.
How It Works
When you submit an application to a debt counselling company, they will perform a debt review to determine your over-indebtedness level. This process involves evaluating your monthly salary, expenses and outstanding debt level. If you are over-indebted, your application will be approved.
Professional debt counselling isn’t free. Applicants must typically pay an application fee, a restructuring fee and debt counselling fee for availing the service. Make sure your debt counsellor provides complete fee structure in writing.
The debt counselling company will work with you to figure out how much money you can put aside each month for meeting your necessary expenses and using the remaining amount to repay your debts. They will make sure that you pay as much as you can afford.
Thereafter, they will inform all credit bureaus, lenders and debt collectors that you are under debt review. This is a simple way to protect your rights until you are able to pay off all your debts.
If your lenders agree with the repayment proposal suggested by the debt counsellor, you will receive a legal order.
During the debt counselling period, you will be making a monthly payment to a Payment Distribution Agency. The agency will pay your creditors.
Apart from clearing debt, debt counselling services helps make repayments easier to manage and minimizes banking fees.
Although the debt settlement time period varies from one person to another, depending on their debt level, a well-known debt counselling is more likely to get a positive response from lenders and credit bureaus.
For comprehensive debt counselling in South Africa, get in touch with Credit Matters. As a fully certified, registered and licensed business, Credit Matters is one of South Africa’s leading debt counselling companies. Contact now to get in touch with one of their debt settlement experts.