• Our Blog

//Is debt review/debt counselling the only option available to clients facing financial distress?

Is debt review/debt counselling the only option available to clients facing financial distress?

As a South African consumer facing financial issues, there are various options available to improve your situation and start paving the way to what can eventually become a debt free existence. In order to restore balance to your finances, it is important to first understand the exact extent of your financial troubles, while also establishing whether or not you are over-indebted.

One of the most common and successful forms of financial aid is debt review, otherwise known as debt counselling. Although this option is well suited to many clients with debt issues (especially in cases where the clients are over indebted), other options are also available and, in certain instances, could prove to be more effective.

Taking a closer look at Debt Review

Debt review is a legal process that can, in many cases, ease the burdens faced by those who are over indebted, while also protecting the client from the possibility of legal action taken against them. In order to initiate the debt review process, our legal team at Kim Armfield & Associates will evaluate your finances in detail and also conduct an affordability assessment that will determine if you are over indebted – if this is the case, we will liaise with your various creditors in order to restructure your monthly repayments so that you can manage them better, while still ensuring that all your debts are being paid off.

Once a client has undergone the debt review process and all debt is paid off, a debt clearance certificate will be issued. You will no longer be under debt review and have the opportunity to start over.

Consider Debt Mediation

Debt Mediation (or Voluntary Distribution as our attorneys have known it) has been available to consumers even before debt review. Debt Counsellors are not supposed to engage in debt mediation (as instructed by the National Credit Regulator), most probably due to the fact that they are not entitled to accept monies directly from consumers. Attorneys, on the other hand, are entitled to accept monies into their trust account for distribution due to the fact that they have legal insurance which protects the consumer.

Debt mediation does not require a court order and it is a service that is worth considering. Voluntary debt mediation can improve your financial standing when done professionally and lawfully, while also protecting your funds. Another benefit of debt mediation is that, if you aren’t already, you can avoid becoming blacklisted.

The debt mediation process is done between our qualified staff assisting you and your creditors, where negotiations will take place to lower your monthly payments as well as settle your debt – basically, you could be paying back a more affordable amount than you owe, while also benefitting from a more reasonable repayment plan that will allow you to live more comfortably within your budget. Debt Management is a service provided by Kim Armfield & Associates, through extensive experience and a highly competent team of attorneys.

Is Debt Sequestration the best option for you?

Although debt sequestration can seem to be a drastic option, this is sometimes necessary and can have beneficial long term results. Sequestration is the legal process that can be utilized by those who are past the point of debt review, with a large and unmanageable sum of debt to their names. Debt Sequestration will allow you as an over indebted South African consumer to declare yourself bankrupt or insolvent, by voluntarily surrendering your estate. There are advantages to Debt Sequestration – you will be able to keep your movable assets, benefit from an affordable monthly payment plan, your salary will be yours and you will no longer have to deal with your creditors directly as this will become the responsibility of our Kim Armfield & Associates attorney.

If you are unsure which financial service will be in your best interest, Kim Armfield & Associates are well versed in all matters of debt management. Get in touch with us today to start your journey to financial freedom.

By |2019-02-16T07:32:48+00:00February 16th, 2019|Blog|