Debt Review South Africa - How To Get Out Of Debt
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At the end of 2010, the credit regulating body of South Africa, known as the National Credit Regulator, estimated that around 200,000 debt review applications have been received in their office. That means that each month, there are between 7,000-8,000 applications for debt review by consumers from all over the country.
Does money seem to be evasive these days that you cannot pay your monthly loan payments anymore? Are you stiff worried about your creditors hauling off your remaining properties? You are not alone, just look at the figures above.
Getting Debt Relief
Debts and loans have existed since mankind started to form an economy. Inherently they are not harmful. People and families get into debts in order to realize their dream as portrayed in the college educational loan. Others use it as capital for a new business venture and personal development. While some use it for home improvement or to acquire a property. Loans can also be tremendously helpful during health emergencies.
However, things can get ugly down the road as circumstances change. This can be a retrenchment, business failure, or simply mismanagement of monthly income and expenditures and the lack of savings. Wherever you are in the spectrum, there exist one or more solutions to try for debt relief. One of them is debt counselling.
In debt counselling, a consumer who is over-indebted and cannot pay his or her current monthly payments through his/her existing means will undergo a debt review process.
Debt review process has basically 2 main phases:
1. The Assessment Phase
Once a consumer has contacted a debt counselor for help, the debt review assessment will commence. In this initial stage, the counselor will conduct an affordability assessment of the individual consumer having problems with his/her capacity to pay debts. At the start of the application, an individual is to pay R50.00 as application fee.
The registered counselor will be the one to determine in the assessment if the applicant is truly over-indebted or not by looking at his/her current financial position. He/She will be declared over-indebted if his/her total monthly debt repayments exceed what's left of his/her monthly expenditure on basic living expenses given his/her monthly income.
As soon as the counselor has examined everything and finds out the consumer is in fact over-indebted then the application is accepted and allowed to proceed. One of the following steps that is taken is the formulation of a debt restructuring proposal which states the amount the person can use to repay his or her debt/s given his or her current financial status. This phase also determines the period of time the individual will be under debt review.
Note that The Act provides certain conditions for an application to be rejected. First, if the individual is not in fact over-indebted. Second, if there is absolutely no income available for debt repayments. Third, if there is no prospect of finding income within a 3 month period in order for the individual to continue paying off debts.
Once you are accepted into debt review by a debt counselor, you will have to stick with the monthly budget the counselor has given all throughout the period you are under debt counselling. This budget is a realistic and sustainable one for you and your family while repaying your debts.
2. Negotiations and Actual Debt Review Process
Recently, the task team of the National Credit Regulator released an enhanced set of debt review process guidelines and rules for every debt counselor to follow. They include all the consumer's, the credit providers', and the debt counselors' responsibilities and expectations. The aim of this is for the process to have a smoother ride down the road to debt relief. It also aims to help all parties cooperate and lessen misunderstandings where technicalities on the process is concerned.
During the formal debt review process, your debt counselor negotiates with your credit providers by submitting the proposed repayment plan. Your counselor should be updating you about the results of each step and proceeding and should consult you where legal matters are applicable. Bear in mind to keep in contact with your counselor and creditors regularly. Remember that voluntary and amiable cooperation in all parties is necessary for a smooth and faster processing.
Article Source: Articlelogy.com
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