The Debt Repayment Risk
As a rule, if you’ve fallen into 3 or more months of arrears and don’t know how you’re going to afford any of your upcoming debt repayments, you should really look into voluntary debt mediation. Credit debt can be a useful means of improving your living standards, a powerful wealth creating tool, or even a lifesaving mechanism, in the case of a medical emergency.
However, unfortunately, it’s impossible to predict with 100% certainty whether or not you’ll be able to meet your debt repayment obligations without a doubt in the upcoming years, as this would require nothing short of an enchanted crystal ball or supernatural psychic powers.
Risk analysis allows microlenders to roughly gauge whether or not you will be a high-risk client, who is likely to default or fall into arrears. Even so, as with most sciences, there are always exceptions.
A Change in Personal Circumstances
A change in your personal circumstances can diminish your ability to pay back your debts, such as the breadwinner of a family passing away, creating unforeseen funeral costs and mouths to feed.
A loved one may fall desperately ill and not have medical aid, creating unexpected medical bills. Your spouse may serve you with divorce papers and, as such, you may need expensive legal representation. You could be retrenched from work and accordingly be unable to cover your monthly debt instalments, on top of your basic living costs.
As you can see, there are many factors beyond your control that may lead to you falling into arrears or being unable to maintain your debt repayments. However, there is one thing that you can do to make sure you are able to rectify your situation as speedily and painlessly as possible, if at all – take immediate action, before you creditors take legal action against you.
Contact Reduce My Debts for Voluntary Debt Mediation
Firstly, we’ll restructure your budget to take your higher monthly living costs and/or lower income into account, or whatever the change in circumstance may be. We will then calculate the amount you can practically contribute towards your debts each month, without it cutting into the money you need for essentials.
Subsequently, we’ll propose new terms and a reduction in your monthly debt payments to your creditors. Along with lower monthly instalments and interest rates, these new terms will also include your creditors agreeing to not take legal action against you.
A Non-Legal Route
Voluntary debt mediation is more affordable, as it doesn’t require any court proceedings, which tend to make things very expensive. However, debt review legally prevents creditors from taking legal action against you, if you’re over-indebted.
Whereas, voluntary debt mediation is more suitable for those who are experiencing a temporary cash flow problem, and thus need a little professional assistance to prevent them from becoming over-indebted or to help them regain full control of their financial affairs.
