What is Debt Counselling?
When a person hears the phrase ‘debt
counselling’ one
may think it is some kind of counselling program whereby you admit
guilt and learn how not to make any debt. Although debt
counselling does involve a form of counselling in the
sense that you receive advice regarding the restructuring of your
debt and your budget, it is a process whereby trained counsellors
apply on your behalf for lower interest rates and a restructured
repayment plan from the creditors.
The debt counselling company negotiates such
interest rates under the protection of the National Credit Regulator
and once you are under debt review, the creditors will not be able
to make further demands for payments. It doesn’t mean that
you will not have to pay the creditors. It does, however, mean
that if you are over indebted that you will be able to pay a lower
monthly amount to each of the creditors. Instead of dealing with
every creditor on your own, you can rely on the counsellors to
negotiate a payment rate far below what you are paying now. You
will only pay one monthly instalment. This amount will be distributed
in the agreed manner amongst the creditors.
It is easier to ensure that one debit order goes off from your
account and only having to speak to the counsellors than avoiding
calls because you were unable to pay three or more creditors. The
creditors are willing to negotiate once you are under debt review
because they know that the law protects you as consumer.
Debt counselling also means that you will not
be able to make more debt for the period under debt review. The
counsellors will advice you regarding an alternative budget, helping
you to become debt free. Once the debt is settled you will receive
a debt clearance certificate and will be able to apply for credit
again. The creditors will not discriminate against you and your
name will be in the clear. Stop the debt cycle. Contact
us for immediate assistance.
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