First of all, your debt counsellor will put together a personal budget, which identifies your total income. Then they will list all of your mandatory expenses like rent, mortgage, household bills, food, travel, child care, electricity etc.
Next, they will detract the second figure from the first. What’s left over is your disposable income to pay off your credit debts. You will need to provide your debt counsellor with payslips and a copy of your ID when you apply. They will then ask your credit providers for Certificates of Balance (COB). Subsequently, they will assesses whether or not you are over-indebted.
If you are over-indebted, you can apply for official debt counselling and your debt counsellor will negotiate with your credit providers to have your instalments, interest rates and fees reduced or eliminated altogether. Moreover, they will provide you with financial advice and draw up a personalised repayment plan for you, which they will send to your credit providers for approval.
If approved, you will only have to pay a single payment to a Payment Distribution Agency (PDA) that will distribute instalments to your various credit providers. However, if you are not over-indebted but are still struggling to pay off your debts, debt management may help you to afford your monthly instalments to prevent over-indebtedness.