Remember that 2024 is Bayport’s year of 2020MORE? In the spirit of our theme, we want to remind you that there is more than one way to deal with your debt problem. What are they, how do you decide which one is best for you and how do you avoid being scammed? We have the answers right here.
When you feel overwhelmed by your debts, switching off your phone and hiding is not the answer. You have to deal with it. Depending on your specific circumstances, you can choose debt consolidation, debt counselling or debt administration.
Counselling and administration are both legal processes because the courts are involved, and both come with costs that you need to pay.
Debt consolidation, in contrast, is not a legal process and you don’t have to pay a debt counsellor or administrator. The only fees involved are the usual loan fees and interest.
Here is a simple checklist to get you started:
1. Are your total debts R50 000 or less?
YES
Debt consolidation
NO, its more
Debt consolidation OR Debt counselling
2. Is your credit score good enough so you can get another loan?
YES
Debt consolidation
NO
Debt consolidation OR Debt counselling
3. Are creditors threatening to take your home, vehicle, furniture or other assets?
YES
Debt counselling
NO
Debt consolidation
When should I consider debt administration?
- When you need legal protection from your creditors, and/or do not qualify for a consolidation loan due to over-indebtedness and a poor credit score.
When should I consider debt counselling?
- When you run the risk of losing your assets, ie, when the bank threatens to repossess your home, vehicle or other assets you have. While you are under debt counselling, and even in the 60 days while your review application is being considered, your creditors cannot take action against you.
- You should also consider debt counselling when you are too indebted to qualify for a debt consolidation loan.
When should I consider debt consolidation?
- When there is no risk that you can lose your home, car or furniture.
- If your credit score is good enough that you can qualify for a consolidation loan, or if your employer has partnered with Bayport Money Solutions.
Debt counselling and an administration order both attract extra fees and you have to stay in the process until all your debt has been settled. This can take a very long time, during which you cannot get any more credit.
With a debt consolidation loan, the only fees involved are the ones related to your loan, and the loan term would be a maximum of 60 months. More importantly, there is no adverse notice on your credit record; only the consolidation loan will reflect on your record, which means you can get more credit when you can afford it.
Can you be forced into, or placed under, debt administration or counselling without your knowledge and consent?
- No, you CANNOT. Both are voluntary, legal processes for which you have to apply.
- If you find that you have been placed under debt review without your knowledge and consent, you must lodge a complaint with the NCR, and the NCR will investigate the matter.
- You can also contact Bayport Money Solutions for help.
Can you be forced into, or placed under, debt administration or counselling without your knowledge and consent?
- No, you CANNOT. Both are voluntary, legal processes for which you have to apply.
- If you find that you have been placed under debt review without your knowledge and consent, you must lodge a complaint with the NCR, and the NCR will investigate the matter.
- You can also contact Bayport Money Solutions for help.
How to avoid being scammed
- Make sure you fully understand the debt solution you choose before you sign any agreement.
- Never pay any fees before you have signed an agreement. Anybody who asks you to pay upfront, is a criminal trying to scam you.
- Only work with a debt counsellor that is registered with the National Credit Regulator (NCR). Ask your potential debt counsellor for his/her NCR number and use that to check on www.ncr.org.za that the person is registered. If you can’t find the person on the website, stop communicating immediately and report them to the NCR.
- Pay your monthly instalments only to an NCR-approved payment distribution agent, and doublecheck that the person gave you right bank account details.
- Only a court order can cancel a debt counselling process or administration order. However, you can get help if a counsellor or administrator is behaving unlawfully and keeping you trapped in the process.
Talk to Bayport Money Solutions for advice.
