Pros and cons of debt counselling

Sometimes people borrow more money than they can afford to pay back and then they find themselves in serious financial trouble.  Debt counselling can help, but there are pros and cons: 

PROS

  • When you are in debt counselling, creditors cannot take  action against you
  • There is no permanent record of having undergone debt counselling
  • There is only one monthly repayment to be made
  • Your budget will meet your basic needs first before provision is made for debts.
  • You will never pay more money than you can reasonably afford
  • A debt counsellor will suggest ways of cutting costs and saving money
  • You will no longer get calls from your creditors demanding payment.

CONS

  • You are not allowed to have more credit while undergoing debt counselling
  • It does cost a little bit of money, but the fees are set by law
  • Your debts might take longer to pay off as a result of paying smaller amounts each month.

 

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