Can I Clear My Credit Record Without Repaying My Debts?

If you are wondering whether it is possible to clear your credit record without having to actually repay all your debts, the short answer is no. But… you might be able to restructure your debts and accounts so that you are able to settle the most urgent accounts first.

If your accounts fall in arrears for long enough, negative listings will begin to show up on your credit report, and these listing can stay on your record for a very long time – sometimes for years!

The National Credit Act has a thing called a data retention period which means that negative listings stay on your credit record for a certain amount of time

To avoid having a judgment listing, or being blacklisted many consumers are using various debt consolidation products offered by the banks and/or applying for Debt Counselling, which protects you from repossession.

Debt Counselling Saves Client Over R1mil

Debt Counseling:

Despite thousands applying for debt counselling every month, many still doubt whether the process is actually helping consumers.

Any doubts about the effectiveness of debt counselling and debt consolidation should be put to rest after reading about this story.

Andre Snyman, managing director of Consumer Assist, explains how one of their clients managed to avoid drowning in debt.

“The man was heavily over-indebted and owed R3 004 985, including his bond. He was paying off R24 400 a month but the interest over the 240 months of the debt was going to amount to R2 783 466 alone. In other words over 20 years, he would pay out R5 788 451” Snyman said.

“The debt counsellor restructured his debt after negotiations with creditors. His monthly payment has dropped to R16 890 a month, which means total interest will come down to R1 544 233 and the debt will be reduced to R2 862 133 – including the debt counselling fees.”

“Simply put, debt counselling helped him remove 92 months off his repayments, eliminate R142 852 debt, reduce monthly payments by R7 600 and the biggest saving will come in the R1 239 243 cut from interest rates – enough to buy a really nice second property. And after this process he will have a clean credit record!”

Read more about Debt Counselling and Debt Consolidation

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.

What is Debt Counselling?

What is Debt Counselling?

What is Debt Counselling and how does it really help you manage your finances and get out of debt?

Debt Counselling is a process that involves educating and assisting over-indebted consumers to restructure their loans into more manageable repayment plans.

Important Note:

After being referred to, or approaching, a Debt Counsellor your monthly repayment obligations will not stop. Instead, your repayments will be renegotiated to a level that is more manageable for you and this will allow you to escape the debt trap.

Debt Counsellors are registered with the National Credit Regulator (NCR) and act under the agreed guidelines by the Debt Counsellors’ Association of South Africa (DCASA), in a bid to curb the exploitation of consumers and reckless lending.

After an interview and assessment has been completed, your counsellor will approach the companies your owe money to and propose a new repayment plan. If this new plan is rejected, he/she is then able to enforce it by submitting a request to the courts for your behalf. Your counsellor is also able to legally protect your assets from bank repossession.

What is Debt Counselling – The Costs

What is Debt Counselling – The Costs

Note there are certain costs involved in the debt counselling process that you will need to pay. These fees are strictly regulated and your advisor must work within those guidelines.

Click Here For More Info: Debt Counselling – What Are The Costs