What does debt management advice entail?

When a consumer is in the middle of a debt crisis, help is needed to sort the issue, but mainly guidance is vital to try and prevent running into further debt. Debt management advice will give a consumer facing debt troubles the necessary educational advice and assistance on financial problems and ways to sort the issue.

The process of debt management is a lengthy one, but the rewards of following the advice down the letter far outweigh the downside of the process. Debt management advice begins with approaching a qualified debt counsellor.

The debt counsellor will sit down with the consumer and go over their finances in order to ascertain a plan to management their debts. This means combing through incomes and expenses and drawing up a budget that allows for necessary living expenses such food, housing and transport while an amount is set aside to pay creditors. Once this budget has been drawn up, the debt counsellor approaches the consumer’s creditors and informs that the consumer is now under debt review. Once this is done, the debt management specialist presents them with a negotiation.

In this negotiation a proposal is given to the creditors to reduce payments and interest rates in order to allow the consumer to repay them in more manageable terms.  The onus is then on the creditor to either accept or reject the proposal. A rejected proposal is then diverted to the magistrate’s court where the presiding magistrate will decide on the matter.

Whilst all this is going on, the consumer is under the protection of the debt review process and creditors cannot take any legal action against them. This is why seeking out debt management advice as soon as possible is the best way that a consumer can safeguard their assets.

Debt management advice is there to protect the consumer and allow the consumer to know how to protect themselves against ruthless creditors and an economy where incomes are stagnant whilst the cost of living around them escalates.

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