A debt counsellor will assess your finances. If you are deemed overindebted, a budget will be drawn up that will help you allocate funds to your basic needs before paying your debt. Ensure that you provide your debt counsellor with all the necessary documents, such as your proof of income, and bank statements – be transparent and be honest.
Once you are under debt counselling, the counsellor will consolidate all your instalments to different creditors into one reduced instalment. They’ll negotiate lower interest rates, meaning the interest you pay will not be as high as the one you’re paying while you’re not under debt counselling.
While you’re are under debt counselling, you will not be allowed to take any more credit until you complete the process. That is when you’ll be issued a Clearance Certificate, which proves that you’ve paid all the debt that was included in your debt counselling contract.
While other people may be losing their assets when times are tough, debt counselling will help you keep yours. Your house and car/s will not be repossessed.
The process prevents creditors from repossessing your assets or taking legal action against you. But you must act swiftly, because if the creditors have already taken legal action against you, that debt will not be included in the debt counselling process. Once you receive a Section 129 notice from your creditors, contact a debt counsellor for advice – it will be your last chance to get help from a debt counsellor.
Having your debt consolidated will also save you bank charges. Having multiple creditors debiting from your account can cost you more than you imagine. Every debit order that goes off your account has a fee. Being under debt counselling means you pay one debit order fee – helping you unlock extra cash that can go towards your other expenses.
