16 May Choosing the Right Debt Help System for You
The more debt you have, the harder it becomes to manage your monthly finances. Debt Counselling is a process that is designed to improve your finances while you repay your debts. It is easy to apply for and, in many cases, proves the simplest and most suited solution to over-indebtedness. Of course, the help of a registered professional is key to getting the best results.
The types of debt help systems in South Africa offer consumers the chance at a new beginning. Choosing the right debt help system for you will depend on your circumstances. Here are key considerations to making an informed decision:
If You Are Over-Indebted:
If your monthly debt repayments exceed your affordability, this is an indication that you are over-indebted. Debt Counselling is only available to consumers who are found to be over-indebted, as a legal form of debt relief.
Debt Counselling is intended for individuals who cannot manage their debts but earn a steady income. A Debt Counsellor from our team will restructure your payments by negotiating with your creditors for reduced amounts. You can pay off what you owe through affordable monthly repayments that work for your budget. These payments are distributed to your creditors by a trusted payment distribution agency.
Whether you have acquired too much debt over time or earn less than you once did, we can help you manage your finances. Debt Counselling is not based on your credit score. In fact, it can help you to improve your finances and creditworthiness over time.
If You Are Not Over-Indebted:
Consider applying for a consolidation loan through a reputable lender in South Africa. This type of loan is taken to repay all your existing loans, meaning you pay back just one monthly repayment. This loan repayment usually comes with lower interest, saving you money.
Debt Review protects you from creditor harassment and legal action relating to your debts. A Debt Consolidation, however, does not offer legal protection, and, in most cases, you will have to qualify by presenting a good credit score when you apply.
Debt Mediation is similar to Debt Counselling and could work for you, however, is not overseen by the National Credit Act. You do not benefit from legal protection, although you pay less each month towards debt. Choosing the right debt help system for you ensures the best chance of becoming debt-free.
A Steady Income Matters:
Having a steady income is part of what makes you eligible for Debt Review. While the process offers a more affordable and structured repayment plan, you are still responsible for making these monthly payments consistently. If you do not earn a monthly salary, choosing the right debt help system for you looks a little different. While the benefits of Debt Review make it the preferred option, it is not always a possibility.
If you are insolvent (your liabilities exceed your assets) and do not earn a monthly income, Voluntary Sequestration is possible. In this instance, you voluntarily surrender your assets to the court, and a trustee sells them to repay your creditors.
Read more about how Debt Review works and consider the best approach to your unique situation. At True North Debt, we ensure a Debt Counselling service you can count on. Contact us today to get started!