Understanding Debt Management
Moneyflow debt management
Understanding Debt Review and Debt Management
Debt can often become overwhelming, especially when unforeseen circumstances disrupt your financial stability. Fortunately, there are solutions available to help you regain control of your finances. In this article, we’ll explore what debt review and debt management are, and how Moneyflow can assist you on your journey to financial freedom.
What is Debt Review?
Purpose: Debt review is a legal process in South Africa designed to help individuals who are over-indebted. It offers protection from creditors while providing a structured plan to pay off debt.
How it Works:
Assessment: A thorough assessment of your financial situation is conducted. This involves understanding your income, expenses, and the total amount of debt you owe.
Negotiation: A debt counselor negotiates with your credit providers to reduce your monthly payments and interest rates.
Single Payment: You make one affordable monthly payment, which is then distributed to all your creditors.
Protection: While under debt review, your assets, such as your home and car, are protected from repossession.
Completion: Once all your debts are paid, you receive a clearance certificate, signifying that you are debt-free.
What is Debt Management?
Purpose: Debt management involves creating a plan to repay your debt in a more manageable way without the legal protections provided by debt review.
How it Works:
Assessment: Like debt review, debt management starts with understanding your financial situation, including income, expenses, and debts.
Advice and Recommendations: You receive personalized advice and a detailed plan to manage and pay off your debts.
Negotiation: In some cases, your debt manager may negotiate with creditors for reduced payments or interest rates.
Ongoing Support: Continuous support is provided to help you stick to your repayment plan and make progress toward becoming debt-free.
