Understanding the Debt Restructuring Process
Are you facing severe financial trouble? Struggling with sleepless nights consumed with the overwhelming anxiety of multiple credit cards, personal loans, a car loan, a home loan, and steep medical bills? Do you feel like you are drowning in debt with nowhere to turn? Getting into debt is easy; it is getting out of debt that is hard! If your expenses are greater than your earnings, if you have pushed your credit cards to their maximum limit but still you have a lot of payments to make each month, or if you have fallen behind on your retail monthly payments then you are a perfect candidate for debt restructuring.
Over-indebtedness is a serious issue facing millions of South African consumers. Firstly, being over-indebted is nothing to be embarrassed about and what’s important to remember is that you are not alone. There are over 16 million South Africans who are struggling to repay their debts with over 6.5 million South Africans of that figure who are currently blacklisted, and these figures are only increasing.
So why are so many consumers falling behind on their debt? Well, there are numerous reasons. We live in a consumer driven society with an unpredictable economy, where we are tempted with reckless lending by creditors every day. No one dances into debt freely, whether you can’t pay your debt for a perfectly valid reason such as an unforeseen illness or medical expenses, job loss or a retrenchment, a death in the family, an expensive divorce to overspending on your credit cards, it doesn’t matter, either way all consumers are obligated by law to honour their debt, even if they don’t have the money.
As a result of this, in 2005 the South African Government took extreme long overdue action and the NCA (National Credit Act) was implemented and became effective on the 1st June 2007 with the intention to help and encourage consumers to bounce back from debt though debt restructuring.
How Does Debt Restructuring Work?
How debt restructuring works is simple, the process is convenient, legal, voluntary and completely successful. It is the practice whereby a debt counsellor will carefully evaluate and assess your current financial situation. The purpose of debt restructuring is to make funds available to pay back your debts while at the same time still allowing you to have enough income to cover all your basic living expenses such as bond, food, rent, school fees and petrol.
One of the key negotiation aims of your appointed debt counsellor is to reduce the minimum amount payable by extending your repayment term. The negotiation will also aim to reduce the interest owed on the debt which will reduce the total end figure making it more manageable for you to pay off your debts. Through debt restructuring, we can reduce your monthly payments by up to 60%!
There is no doubt that debt restructuring has been a saving grace to all over-indebted South African consumers. It offers consumers an incredible opportunity to bounce back from their debt without taking out any additional loans, using their own afforded income to pay one reduced repayment each month until the debt has been covered. When under the debt restructuring process you are protected by the National Credit Act and creditors cannot take further legal action against you, they cannot contact you, hassle you or place you under administration. It is a stress-free ‘financial rescue’ that at the end of the day will cost you far less than that of foreclosure, administration, judgement and sequestration.
If you have identified that you need debt assistance, enrolling in a debt restructuring program with Maxlaw Credit Legal is an excellent choice for you. Our debt counsellors will provide you with a golden opportunity to regain control over your finances and to look to the future with a better understanding of maintaining your credit. Contact us today to chat to us about our debt restructuring rates and end 2014 debt FREE!