Archive for ◊ July, 2009 ◊

Outstanding Debt
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According to the National Credit Act, Section 73, certain rules and legislation regarding outstanding debt have changed as from 1 June 2007. Consumers who want to dispute any information that appears on the credit bureaux can enlist the services of the Credit Information Ombud free of charge. Outstanding debt is simply money owed that has not been paid yet. Debt that remains outstanding usually leads to an indebted consumer being reported to the credit bureaus, putting a stop to the consumer’s ability to obtain credit.

Insurance policies are available against outstanding debt at the time of your death. In such cases, the insurance policy will pay outstanding debt on, for example, your house or your car, in full to the loan provider. This is especially useful if you do not want to leave your family and loved ones behind with your outstanding debt. Similar insurance policies pay your outstanding debt if you were to become disabled as well.

Debt Management
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Some banks offer a service whereby a consumer can consolidate his debt by using his home loan account. Under such an arrangement, the home loan repayment period is extended, often up to thirty years. This lowers the monthly amount and eases the consumer’s cash flow. In many cases, this period can be decreased again later without incurring additional costs.

If you are still coping with your payments, but need some relief, some debt management companies can help you manage your debt without having to enter into debt counselling. They can organise a more affordable monthly budget and facilitate in communicating with creditors.

What is Debt Counselling?
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Debt Counselling is a professional service provided for over-indebted consumers. It is a process regulated by the new National Credit Act and provides you, the consumer, with greater protection against creditors wishing to take legal action.

The goal of Debt Counselling is to develop a repayment plan that is affordable to you and acceptable to all of your creditors. This repayment plan will still allow you to meet your basic living expenses. The process with the creditors is managed by your appointed Debt Counsellor who represents your best interests.