How the debt restructuring process works in 6 steps

You’ve made the decision to tackle your debt and work with a professional so what happens next? How does the process work and what can you expect from this point onwards?

In this article I will break down our debt restructuring process for you, so you always know what to expect, every step of the journey.

Step one: Book a call with me

The first step is for you and me to have a call or online meeting. At Premier Debt we offer different programs designed for different circumstances. During our call I will give you the rundown of all the programs and get a better understanding of your financial position. You will have the opportunity to find out about our three different programs which are debt management, debt review and sequestration. Our goal is to provide you with an understanding of each program and how they differ so you can select the one that will work best for you.

Step two: Get a consultation with a professional debt adviser

Once you have decided on a program, I will connect you with one of the professional debt advisers in my network. All advisers that we work with have been personally vetted and selected by me. We don’t work with just anyone. After years of experience in the industry we know who are the companies to avoid. We take great care in ensuring that companies we refer to are legitimate. Our partner’s also must adhere to the Premier Debt Network code of ethics. As one of the founders of the Premier Debt Network, it’s my duty to make sure our partners give you excellent service. I’m here to resolve any problems you may have. You are always in good hands.

During the assessment, the debt adviser will ask you questions to work out the following:

1. Your monthly income

2. Your monthly living expenses

3. All your accounts, what you pay monthly and how much in total you still owe to creditors

This information is used to work out your new monthly consolidated debt payment. When you are over-indebted, your income is no longer enough to cover living expenses and debt. That’s why your debt adviser must rework your finances in a new way to ensure your salary covers everything again. You need to bring your finances back into balance through restructuring.

It’s not possible to tell you how much you will pay or how long you will pay without an assessment. Every person has different living circumstances and amounts that are paid monthly. So only after looking at your specific expenses can we work out a figure for you. The repayment period will be based on the amount you repay monthly which depends on how much your income and living expenses are.

After your assessment the debt adviser will forward you a quote. This will contain your new consolidated debt payment and an estimate of how long it will take to settle the debt.

Up until this point there is no obligation or cost. The initial assessment and quote are cost free. It’s an opportunity for you to speak to an expert and get a clear roadmap for how they will help you navigate out of debt.

Step 3: Accept the proposal

When you are happy with the proposal, you can sign the agreement and return all required documentation to your debt adviser. Your debt adviser will then instruct you to stop paying your creditors. You will receive bank details for where to pay one consolidated payment going forward. Remember you no longer must worry about making individual payments to creditors. This slack is transferred to your debt adviser. You simply make one payment, and your debt adviser handles the rest for you.

It’s also important to mention that at this point you will also be instructed to change your bank account. This is done to protect you. If your creditors no longer have your bank details it prevents them from trying to collect more money from you. This is especially important if your bank is your creditor. Banks can load a special software on your bank account that deducts money as soon as it reflects in your account. So, we say rather be safe than sorry and start with a new account.

Step 4: Start the process

Step 1-3 is the information gathering stage, selecting the program, and getting ready to start. But nothing changes until you commit with a payment. As soon as your debt adviser receives your payment, he or she will start the process. Your debt adviser will contact your creditors to let them know that he or she now manages your accounts. New agreements will be setup with all your creditors based on what you can afford. The debt adviser will allocate your payment between all creditors, based on what you owe.

In the beginning it may seem like things are moving very slow but that is normal. Your first two payments go to legal and debt adviser fees. This is to get your program setup and ensure you are legally protected. You only pay the upfront fee once and this is a small fee to sacrifice for the thousands of rands you will save in the long run. Your creditors will start receiving payments from month three. They are aware of how it works and will have direct contact with your adviser. From the time that you pay your first payment, you can direct any creditor calls directly to your adviser. The discussions and negotiations are no longer your problem. All you need to do is focus on your personal life goals and make sure the monthly payment gets paid.

Step 5: Keep paying your monthly payments until your debt is cleared

If you keep to the agreement and pay every month on time, your credit report will start to improve over time. By making consistent monthly payments it improves your score. You will also not be taking out more credit or even using more credit. So, every payment that goes to your creditors reduces the debt burden. When one account is cleared, the money will be allocated to other accounts so that all debt is paid up as soon as possible. Reducing your total debt and not applying for more credit will also improve your score over time.

Remember it didn’t take you one or even 6 months to get into debt. So, it’s going to take some time to reverse the debt and fix your name. If you do nothing, nothing will change, but if you start now, every month will be a step in the right direction.

Stick to the plan and work with your adviser and you will eventually see that good credit score. The juice will be worth the squeeze.

Step 6: Clearance certificate

As soon as you have made your last payment, your debt adviser will issue you with a clearance certificate. All old accounts would be paid up and removed from your credit profile. It’s now time to start afresh with a clean slate, and a new credit record.

Some clients can qualify for new credit within weeks, others take a little longer. Each client is different, and your debt adviser will guide you on what needs to happen for you to qualify for credit again.

That’s the debt restructuring plan summarized in 6 steps.

If you have already completed our call back form, I look forward to connecting with you. Please look out for my call from 021 780 1046.

If you have not completed our call back form, you can get started below.

Fill out the form to start step one now