If a person is stuck in a financial predicament and struggling to pay accounts and debt, debt control management can be utilized. If facing financial debt, outside assistance can be used to take control of the situation for the consumer and find a solution to resolve the situation from an outside and logical perspective.
Consumers in South Africa are fortunate enough to be protected by the National Credit Act. Established in 2007 it made provision for debt counselling services to be made available to consumers who are drowning in debt and need help managing their debts effectively.
Debt control management is the process of allowing a debt counsellor to take control of the situation and review a consumerís finances. By doing this they will be able to create a new budget that meets to consumerís current financial needs and well as means. They will set up negotiations with creditors to reduce payments by lowering interest rates, or reorganizing payment terms.
Although debt control management does reflect on a consumerís credit history, once the process is complete and all the debts restructured under it have been paid up, a consumer is given a debt clearance certificate that effectively removes their negative credit history. It states that a consumer has been rehabilitated and signals to future creditors that the consumer is responsible enough to be trusted with debt again.
A debt counsellor does not manage the payments directly and neither does the consumer. A payment distribution agency will receive the consumerís money, and disperse it according to the agreements set in place with the debt counsellor. This ensures that creditors receive their money on time and that no payments are missed in future.
Debt Control Management is the rainy day umbrella that consumers need when their finances begin spiraling out of control, as it will keep them safe, save their assets, and ensure sunnier days ahead once it is over.