So, you’ve reached the end of the debt counselling journey – a fantastic achievement. Like many who have been part of the programme, you are probably wondering what’s next and how your life is going to change after the programme.
Here is what you should expect:
Once all the necessary paid up letters from your respective credit providers have been received, your debt counsellor will issue you with a clearance certificate which is also known as a Form 19. This certificate confirms that you have settled all your accounts listed under the debt counselling agreement and that all of your accounts are paid up – this excludes your home loan, which just needs to be up to date with payment.
Once all the paid up letters have been obtained, the clearance certificate must be issued within seven days of finishing the programme. The debt counsellor will ensure that the credit bureaus receive the certificate so that you are no longer flagged under debt counselling.
Can you apply for credit?
Since you have been rehabilitated, you can apply for credit as soon as the debt counsellor hands you your clearance certificate. Your status as someone who was under debt counselling will not have a negative impact on how the creditors perceive you. If anything, they will perceive you as a responsible consumer who realised that they were overindebted and acted accordingly.
It is highly advisable that you set up a realistic budget and draw up a financial plan before you attempt to take out any new credit. Your debt counsellor and/or a financial advisor will be happy to assist you with this budget as well as a sustainable financial plan for the future.
How will your credit score be affected?
Naturally, your credit score will be low after debt counselling. But you can rebuild it by ensuring that you pay your accounts on time. Creditors always look at your payment history when they are risk profiling you for credit. Make sure that service agreements such as DStv, Telkom accounts, and phone contracts are up to date.
After you have completed the debt counselling programme, pull up your credit report to see if it is updated. If not, immediately inform the bureau, so that they can correct any mistakes. Those mistakes could cost you your credit score.
Can you apply for debt counselling for a second time?
You can apply for debt counselling any time you feel over-indebted. However, the debt counsellor must also do an assessment to determine if you are indeed over-indebted.
DebtBusters has a trained team of consultants who will help you negotiate debt settlement discounts with your creditors. If you are struggling to pay your monthly instalments, do not hesitate to call us on 086 999 0606.