when it comes to “out of control” debt, many of us feel helpless and that there is simply no way to remedy mounting bills and exorbitant interest rates. there are, however, a few useful steps you can undertake to help alleviate your debt and effectively meet your financial goals. this piece will consider a few […]
Excessive consumer debt has become a reality for individuals from all backgrounds and professions. Increased interest rates and changes to payment requirements can quickly make debt repayment next to impossible for the average individual. Missed payments accrue late penalties, creditors begin the collection process and each debtor’s credit history can take quite a negative impact.
The drawbacks and ill effects of unmanageable debt are well documented. Stress levels can increase dramatically for most individuals in these situations, leading to lost work productivity, poor health and even relationship troubles. Negotiating with creditors on one’s own normally yields little progress for many people, so seeking the help of a debt solutions advisor is highly recommended.
Debt Solutions for South African Borrowers
A reputable debt solutions firm is staffed will knowledgeable professionals who can guide clients through the process of debt review. They can also assist with preparation of all documentation and forms to be submitted to the court system as per the National Credit Act of 1995. Many companies specializing in debt solutions have in-house legal counsel as well, which can be quite advantageous for answering questions consumers have concerning creditor negotiation.
Available Options for Debt Solutions
The main debt solutions available to South African borrowers are credit counseling and a form of negotiated debt consolidation known as debt review. The second route is among the most common debt solutions because anyone with documented proof of an excessive debt-to-income ratio is eligible. During the debt review process, creditors are barred from taking legal action against a debtor while a debt solutions specialist works for repayment terms on his or her behalf.
One important element of debt relief is that both debtor and creditor are able to accept or reject one another’s proposed terms for repayment schedules, lowered interest rates and consolidations of separate accounts into one monthly payment.
Both parties can negotiate until reaching mutually beneficial debt solutions for each individual case, and a debt counselor acts as a source of advice for the debtor during this process. Once the debt review repayment plan is agreed upon and submitted to the court system, it becomes a legally binding agreement for the borrower to complete these debt solutions.
The Legal Aspects of Debt Solutions
Debt solutions involve legal aspects in several different ways, namely the intervention of the Court of Affidavit if creditors make several rejections of repayment terms. After a debt counselor has worked out a set of repayment schedules to each creditor based on a debtor’s available income, there is the option to override a rejection if the debt solutions are deemed fair and reasonable. This element of the debt review process is designed to place checks and balances on creditors who are less than willing to accept reduced repayments as part of available debt solutions.
Seeking Debt Solutions from Qualified Sources
The best resources for debt solutions in South Africa include firms with debt counselors who have been vetted by the National Credit Regulator. These financial advisors also typically have certifications from one of several credit counseling professional organizations. A quality debt solutions advisor also has plenty of experience formulating repayment amounts based on each client’s income left over after basic living expenses.
When comparing the services of different debt solution agencies, prospective clients are advised to ask questions about each provider’s credentials and success rates with creditor negotiation. The number of years a debt solutions firm has been in business is also a telling sign because more established agencies have had the time to build up solid reputations.
Debt review is the most frequently-sought form of debt solutions for many South African consumers, and credit counseling is another recommended avenue during this debt relief process. An experienced debt counselor can help to educate clients about household budgeting, preparing for interest rate fluctuations and other preventative measures for avoiding the same kind of excessive debt in the future. Opting for these types of debt solutions does not entail taking out another loan; it instead involves a good-faith set of agreements to settle outstanding debts according to mutually beneficial terms. The process does not render anyone debt-free overnight, but these debt solutions have good success rates for borrowers who make all repayments.