Millions of people in South Africa are in debt and are finding it very difficult to service their current debt with the ever present possibility that your assets may be attached by one of your debtors. Debt management is a responsible way to settle your debt over time without fear of having your assets attached.
Perhaps you have been retrenched or your working hours have been reduced due to downsizing or you have had credit thrust upon you by unscrupulous retail outlets. There are many reasons why people get themselves into positions where they are unable to afford making their payments and require the protection of debt management services to protect their lifestyles and assets.
Here are five good reasons to use a debt management program:
- Lower interest rate: Paying debt back with a lower interest rate will save you money. Creditors are made aware that you have joined a DMP (Debt Management Program) which works in your favour. The amount of money you owe in debt is added together and an average amount is calculated. The average interest rate is calculated to determine the interest rate of combined debt which will be repaid to creditors.
- Shortened payoff time: Paying off debt at a lower interest rate and saving money means that the duration to pay off your debt is shortened. This means that you have more money aside to make payments towards your principal.
- No reminders to pay debt from creditors and collection agencies: Once you have joined a DMP it will be clear to creditors and collection agencies that you are taking charge of paying your debt and repayment amounts are negotiated with creditors by the DMP.
- Reduce anxiety and stress: Worrying about being able to pay your debt and the possibility that a judgement may be obtained by one or more of your creditors is stressful. By taking responsibility for paying off your debt through a DMP will give you peace of mind that your debtors cannot approach the courts and obtain an attachment order.
- A single payment: By making one payment every month toward a DMP saves you from paying creditors yourself and also saves you on bank charges. The payment is often made electronically from your account which means that the various creditors are paid on time. The monthly instalment paid towards DMP is divided and paid directly to your the creditors. Once the creditors have been paid you are no longer in debt.
Using a debt management program makes sense if you are serious about covering your debt. While your existing debt is being cleared you cannot take out further debt and your credit profile will reflect that you are in debt management. This is often one of the best things can happen to many people who have a propensity to become over indebted where you are forced to only buy things that you can afford.
Going into debt management is a responsible and mature decision to make if you have over extended yourself and have little or no ability of meeting your debt obligations with your current income. Most of the time managing your finances is common sense. Spend within your means, stay away from credit cards, and use your money for necessities before you spend it on entertainment. Become financially aware by educating yourself and use a budget plan. It requires ambition and effort to stay debt free. Debt management is a secure and trusted way to clear and manage your debt. Take charge and responsibility of your life today and clear your debt!