Benefits of Debt Counselling
If you have multiple debts with high interest rates, creditors and collections agencies hounding you for payments, and you struggle to track your minimum payments, it might be time for debt counselling. Debt review, or debt counselling, is a government initiative debt help system designed to assist consumers who can’t afford to make minimum payments or pay their essential expenses.
Debt review is a fantastic means of reducing minimum payments and interest rates, obtaining protection from creditors, consolidating debt, improving your credit score, and attaining financial education.
Reduce Minimum Payments and Interest Rates
Your debt counsellor will negotiate with creditors on your behalf for reduced minimum payments and interest rates. Legally, your creditors must comply with requests to negotiate rates, as this is part of the National Credit Act’s means of protecting over-indebted consumers.
Obtain Protection from Creditors
When you complete your debt counselling application form (Form 16), you are automatically protected from judgments, sequestrations, administration orders, garnishee orders, bankruptcy, and having your assets repossessed. This is because the National Credit Act stipulates that once you have applied for debt review, you must be loaded onto the debt help system under the applied code, which shows on your credit record — one of your rights under debt review.
Consolidate Your Debt
Your debt will be consolidated into one big chunk. Every month, you’ll make payments to reduce your debt. The payments will be distributed to your creditors by payment distribution agencies (PDAs).
Improve Your Credit Score
Come the end of debt counselling, you’ll receive a clearance certificate you can submit to credit bureaus and expunge all records of debt and debt review from your credit score. This gives you a fresh start, allowing you to rebuild your credit score and apply for credit in the future.
Financial Education and Planning
Your debt counsellor will work with you to create a feasible budget and financial plan. Your budget will reflect the money you save on repayments with debt review, freeing up space for you to save for an emergency fund or spend your money how you would like to.
All in all, debt counselling/debt review is the ultimate debt help system. It lowers your repayments and interest, saves you money, protects you from debt-related legal action, makes your debt manageable, helps to build your credit score, and ensures you receive sound financial instruction.
If you have any queries about debt review or would like to apply, please contact True North Debt. We would be delighted to assist you on your way to financial freedom.
