Bad Debt and Debt Counselling
Accountancy teaches us that credit providers write off some debt due to non-payment and reflect this as bad debt on their balance sheets. This has gone a long way in creating the misconception by the man on the street that if you do not pay your debt, it will simply be written off. However, this is not the case and non-payment of debt will result in higher interest rates and other costs and penalties that the consumer should be aware of. The late or non-payment of debt can also result in your credit provider taking legal action against you. Once you have a judgment against your name, it will be reflected on your credit rating and make it difficult, if not impossible to enter into new credit agreements even once the debt has been settled.
Credit bureaux in South Africa may not keep a record of a judgement against you or a blacklisting for a period of more than five years. This does not mean that you no longer owe your creditor their money and that the amount owing has automatically been entered as bad debt. It is therefore imperative that you stay in contact with your credit providers, especially if you have failed to meet your monthly financial obligations, the ostrich approach (your head in the sand) will simply result in further problems. You can also contact a lawyer or debt counsellor to get the best advice on how to handle the repayment of debt to a creditor who you have neglected.
If you have become over indebted and can no longer make your monthly repayments, find out from a debt counsellor how you can go about restructuring your debt. A debt counsellor is there to offer you assistance in clearing your name and your debt as quickly and conveniently a possible.
For more information on bad debt and the benefits of employing a debt counsellor to solve your personal credit crisis, please contact us.
|
