DEBT MANAGEMENT PLANS 

Putting together Debt Managment Plans form part of a Debt Relief Experts' job description and they are well versed in all the different debt management plans available in South Africa.  In some instances, even abroad.  However, we are mostly in South Africa.  Therefore, debt management plans are very complicated and need to be managed properly to be effective. 

Executing effective debt management plans is an important step towards obtaining financial freedom. Understanding your debt and its levels is critical to efficiently managing it.

Is all debt bed debt?  
While some debt is required and can even be beneficial to your financial health, too much debt can overwhelm you and make it difficult to get to the end of each month. If you have a lot of debt, you might be deemed over-indebted.

What does it mean when you talk about being over-indebted?
If you are overly indebted, you will be unable to maintain a reasonable living standard and pay off all of your debts with your income.

A few other symptoms you might be over-indebted:
You have received a letter of demands from creditors demanding payment.
You need credit to afford your basic needs to subsist / survive through the month.
You're considering taking out a payday loan to cover your current bills and struggle to survive without debt. 

What constitutes good debt management plans?
Effective debt management is lowering your reliance on debt and, whenever possible, paying it off to increase cash flow. To accomplish this, you will need a debt management strategy or plan.

Three different debt management plans or strategies

If you want to manage your money despite being in debt, you can explore these three debt management plans:

1.  The Snowball debt management plan
2.  Debt Review / Debt Counselling 
3.  The Debt Avalanche debt management plan


The Snowball Debt Management Plan
*  Using this strategy, you list all of your debts.
*  You then determine the smallest debt.
*  You will pay a bit more each month on the smallest debt until it is paid in full.
*  Once you have successfully paid off your smallest loan, you will go to the next debt. 

*  You will then apply the funds you used to pay off your initial obligation to the next smallest loan installment. 

*  Do this until you've paid off all of your bills.


Debt counselling, also known as debt review, is a debt relief measure implemented under the National Credit Act. All procedures, including fees, are overseen by the National Credit Regulator (NCR).

How does debt review work in South Africa?
A registered debt counsellor will evaluate whether you are overindebted. They will accomplish this by performing a financial analysis based on your income and expenses.

It's been established, you are indeed over-indebted. What's next?
Negotiating with your creditors is the next stage. Debt counsellors are going to contact your creditors to negotiate reduced interest rates on your current debts.

Creating a payment plan
Your debt relief expert and debt counsellor will then create a restructured repayment plan in which you will pay only one reduced monthly installment for all your debt. Unlike a debt consolidation loan, you will not have to take on any more debt.  

What's next?
This repayment plan will be taken to court, and a court order will be issued to ensure that creditors cannot take legal action against you.

How much does a debt counsellor charge?
The debt counselling process, like any other service, incurs fees. It is not free. Typically, your debt counselling fees are equal to the first two months' worth of your debt review. This means that no one is paid the same amount for debt counselling. This cost will be determined by your overall debt, and the length of your debt review process. However, rigorous restrictions govern the maximum amount debt counsellors can charge in South Africa.


Debt Avalanche Method
The debt avalanche approach is a common debt repayment strategy that prioritises paying off loans with the highest interest rates first.

The Debt Avalanche process explained.
The debt avalanche plan involves paying off the loans or credit cards with the highest interest rates first, while making minimal payments on the rest. By addressing high-interest bills early, you can save a large amount of money in the long term.

How does the Debt Avalanche process work?
This is how it works. Let's imagine you have several loans, including a credit card with a 26% interest rate, a personal loan with a 10% interest rate, and a car loan with a 0.98% interest rate. With the debt avalanche strategy, you would prioritise paying off your credit card first, as it has the highest interest rate. Once that is paid off, you can go on to the personal loan, and then the car loan.


What are the benefits of the Debt Avalanche debt management plan?
Eliminating high-interest bills first not only reduces the amount of interest you'll pay over time, but it also frees up more money to pay down your other debts. This technique gives you momentum as you pay off every financial obligation, inspiring you to continue your debt-free journey.

If you're uncertain about how to manage your debt, consult with a professional debt management expert.
Speak with an accredited Debt Relief Specialist to help you manage your debt. This is extremely important, especially if you’re already struggling with over-indebtedness. Trying to manage your debt when you’re over-indebted is like climbing Mt. Everest without any gear. You need professional assistance to get you through this difficult time and Cure Debt, being the only Debt Relief Solutions company in SA that consist with all the different debt relief solutions under one roof will be able to help you in this endeavour. We care about you and helping you become debt free.

Why Cure Debt?
Cure Debt the ultimate Debt Relief Solution to your unique debt problem.  With a proven track record, we are proud to state that can help you Become Debt Free.