What You should Know About Debt Counselling

Are you feeling overwhelmed by debt? Do you need a legal and effective way to deal with it? If so, you may benefit from debt counselling. Debt counselling is a process that was introduced by the National Credit Act in 2007. It helps people who are over-indebted and can’t cope with their debt repayments. Ultimately, debt counselling can make your life easier.

When you undergo debt counselling with True North Debt, we will help you by applying for debt review. After that, we will negotiate with your creditors on your behalf to lower your monthly payments and interest rates. True North Debt will also help you create a new financial plan and budget, based on your new interest rates and payments. This way, you will be able to pay what you can afford every month.

Doesn’t that sound amazing? Then why do many people look at debt counselling in a bad way? Well, that’s because most people don’t have enough knowledge about debt counselling while many more are misinformed. That’s why today, we’re going to look at some of the positive aspects of debt counselling.

1. Debt Counselling Protects You from Creditors

One of the main benefits of debt counselling is that it protects you from creditors who might want to harass you or take legal action against you

One of the main benefits of debt counselling is that it protects you from creditors who might want to harass you or take legal action against you. When you are in debt counselling, you are under the protection of the National Credit Act (NCA).

This means that creditors cannot sue you, repossess your assets, or contact you directly for payment. They have to deal with your debt counsellor instead. This gives you peace of mind and allows you to focus on improving your financial situation.

2. Debt Counselling Leads to One Monthly Repayment Amount

Another benefit of debt counselling is that it leads to one monthly repayment amount. This means that instead of paying multiple creditors with different interest rates and due dates, you only pay one amount to your debt counsellor, who then distributes it to your credit providers according to the agreed plan .

This can make it easier for you to manage your cash flow and avoid missing payments or incurring penalties . It can also reduce the stress and hassle of dealing with multiple creditors and collection agencies.

3. Debt Counselling Can Help You Cut Costs and Save Money

One of the most important benefits of debt counselling is that it can help you cut costs and save money

One of the most important benefits of debt counselling is that it can help you cut costs and save money. This is because debt counsellors can negotiate lower interest rates and fees with your credit providers, which can reduce the total amount of debt you owe .

For example, if you have a credit card debt of R10,000 with an interest rate of 20% per year, you will end up paying R12,000 in one year. However, by negotiating with your creditors, we at True North Debt can lower the interest rate to 10% (for example), you then only have to pay R11,000 in one year, saving R1,000 . Debt counselling can also help you avoid extra charges such as late payment fees, legal fees, or collection fees that can increase your debt.

4. Debt Counselling Can Help Improve Your Credit Score

Debt counselling can help you improve your credit score by helping you pay off your debt in full and on time. When you enroll in debt counselling with True North Debt, your credit record will be flagged as “under debt review”. This means that you are not allowed to access more credit while you are under the process .

Once you have completed the debt counselling process and paid off all your debts, your accounts will be updated to “paid-off” and your credit score will start to improve . This can help you restore your financial reputation and access better credit opportunities in the future.

Take the First Step to Financial Restoration

Debt counselling is one of the first steps you can take to restore your finance health

If you are struggling with debt, we are pretty sure that’s been a very difficult time for you. But you can breathe a sigh of relief now that you are more informed about the positive aspects of debt counselling. In fact, you can jump for joy knowing that everything will be okay. We at True North Debt want to help you restore your finances to the prosperity you once had. So why not contact us now? It will be the first step you take towards your financial restoration.