Archive for October, 2009
The Debt Review System In SA Is Going Through A Learning Phrase
Debt Counselling News: The high demand for debt counselling assistance has placed pressure on the debt review system, revealing some areas that need urgent attention.
A study has shown that some banks and creditor providers have not come to the party with regards to helping their clients get out of debt, through the debt review process.
Through the process of Debt Counselling, clients who are struggling to manage their monthly expenses may be placed under debt review. The debt counsellor would then restructure the clients monthly repayments and make it more affordable. This would protect you from becoming blacklisted and it will protect your assets from repossession.
But, according to the DailyNews, a 2 month study completed by the University of Pretoria has revealed that many banks and credit providers have not been very supportive of the debt counselling process.
THE PROBLEMS
Among the biggest problems has been the delay in collecting the relevant supporting documents, also banks are at times failing to stop debit orders, or continuing to take legal action despite their clients being under debt review.
Your debt counsellor has up to 60 days to complete the process, from application to submitting the completed proposal on the court. If this not completed within the legal time frame the credit provider is free to withdraw from the process, and proceed with legal action against you.
FINDING SOLUTIONS
“All players have been pointing fingers at each other, so we wanted to get to the bottom of what is actually going on,” said Peter Setou, the National Credit Regulator’s senior manager for education and strategy.
“All the players are holding regular meetings and exploring ways of co-operating in this process,” he said, with the result that relations had improved somewhat since the study was done.
The credit providers should not only be embracing the debt-counselling process, Setou said, but contributing to its costs
DEMAND HAS EXCEEDED EXPECTATIONS
Currently about 112 000 over-indebted South Africans are under debt review, with at least 10 000 more applying every month.
Debt Consolidation Loans
Although debt consolidation has existed for a number of years, its benefits were reserved for those you were fortunate enough to qualify for private banking.
This soon changed, when financial institutions realised that it would benefit the bank and its many clients to offer debt consolidation loans to all.
Debt Consolidation is simply the process of combing all your debts into one account. This is more manageable and also helps to lower your monthly expenses.
The benefits of debt consolidation loans
The idea behind consolidation loans is to allow you to dig yourself out of debt.
Credit card, person loan and retail card debts are unsecured loans which attract very high interest charges.
Your home loan, which is a secured by the value of your property, has a much lower interest rate.
By using your homeloan to combine your debts into one low interest account you will lower you monthly expenses, and be able to make huge savings in interest payments.
The dangers of debt consolidation
After consolidating their debts many consumers are tempted to apply for even more credit, which leads to greater financial problems.
But, if you are disciplined and determined enough, you can rise out of debt the trap, and start living a life of financial freedom.