What Is Debt Counselling And What Does The Process Involve?

 

Debt counselling is a service that is offered by a number of financial institutions. It is offered to people who are over indebted and the entire process is regulated by the NCA (National Credit Act). Undergoing debt counselling will ensure that creditors are unable to take legal action against you or black list you, but this is not its main purpose. The whole point of debt counselling is to assist consumers to set in place a repayment plan that is realistically affordable to the consumer and meets with the creditor’s approval.

How do you go about obtaining debt counselling and what does the process involve? Well, the first step would be to select a debt counsellor that is accredited by the NCR. You will need to complete documentation and go over your financial status with the counsellor. Your level of debt will be analysed and confirmed. Once this has been done, your counsellor will go about negotiating a better repayment plan with each of your creditors. They are usually able to obtain lower interest rates due to their negotiation skills and power. Once all your creditors accept the agreement and new payment scheme, the repayment plan is implemented and you will be expected to stick to it strictly.

After having applied for debt counselling your consultant will usually notify all your creditors of this. This means that they will not be able to take legal action against you or attach any of your possessions for at least 3 calendar months. The credit bureau will have you registered on their system as “under debt review” which will be changed when all your outstanding debt has been settled as per your agreement with each creditor. This means that you will not be able to apply for additional credit during this time, but will be provided with a certificate to confirm that your debt has been settled, once it has.

Obtaining debt counselling is certainly advised if you find yourself at the mercy of unpaid creditors. Take the time to contact Debtcor and set in place an affordable repayment scheme without delay.

 

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