If you find yourself in a situation where you have too much debt, and not enough to pay the monthly installments, there are various options to consider. For example, many consumers are so desperate to survive financially that they take out more loans and credit cards to cover expenses and other debt, unfortunately sometimes under very high interest rates. This means that they often get trapped in a spiral of debt that is almost impossible to get out of.
However, the onus is also with the creditor to ensure that – when someone applies for any type of credit – that they can in fact afford to pay it back. This means that a proper credit assessment has to be done, where the consumer has a responsibility to truthfully declare all monthly expenses. But if the creditor fails to do so, a debt counsellor can help with a “reckless lending application” and in many cases, the Court will order the creditor to write off the debt.
If you have too much debt, there are various ways in which a debt counsellor can help you. When you apply for debt review, your debt counsellor will first work out your budget and living expenses, and what ever is left over, will be used to work out a payment plan to pay back your creditors. This payment plan will eventually become a court order, and you will be protected under the law as long as you keep paying your monthly lowered installment as per your debt counsellor’s payment proposal plan.