facebook

How Does Debt Counselling Work?

 

Personal Budget 

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.

 

Over-indebtedness Assessment 

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.

 

Repayment Plan 

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.

 

Instalment Distribution 

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.

Free Call Back Form

We'll Contact You!

"*" indicates required fields

Accept terms and conditions?*
This field is for validation purposes and should be left unchanged.

Related posts

How to Get a Loan Under Debt Review

How to Get a Loan Under Debt Review

How to get a loan under debt review   If you're wondering how to get a loan under debt review, your debt counsellor should inform you that you will not be allowed to until you settle your debts. So what is debt review and how does it work? Debt review is a legal...

Writing A Letter Of Demand: Essential Steps

Writing A Letter Of Demand: Essential Steps

Have you ever found yourself in a situation where you've tried everything to get paid, but nothing seems to work? Enter the letter of demand. This is often the final step you take before starting legal proceedings. A letter of demand clearly states how much money is...

How to Sell My Car Safely: A Comprehensive Guide

How to Sell My Car Safely: A Comprehensive Guide

Selling your vehicle Handling car payments can be tricky, especially when it gets to a time where you can no longer afford the monthly installments. A great option to get yourself out of the mud, selling your car before you miss any payments, and using the proceeds to...