What happens if I miss my monthly repayments when I am under debt counselling?

Missing a monthly payment is a dangerous move. It can lead to the loss of your Debt Counselling benefits, and can force you to go back to dealing with debt the way you did before you joined a debt counselling program. 

This is because creditors act as soon as they see non-payments, and try to retrieve the money owed to them. 

If you feel that you may miss a payment, it’s best to get in contact with your debt counsellor ahead of time or as soon as possible, so they can help you make a plan and explain the circumstances to your creditors too. 

We dive into everything you need to know about missing debt counselling payments in more detail below. 

How does going under debt counselling work? 

Debt counselling is a legally regulated (see the National Credit Act) process. It’s a safe and secure way to ensure that you pay back your debt, while having cash to spend on day-to-day expenses. Here’s how the process of joining debt counselling works: 

1. You get in touch with a debt counselling expert. 

2. A financial assessor determines the full extent of your financial situation and builds you a new budget based on what you can afford.

3. The debt counsellor then lowers your interest rates and fees by negotiating with creditors on your behalf. 

4. Once all parties have agreed on the new amounts, your debt is consolidated into one monthly payment amount. 

5. You then pay that amount every month until your debt is fully repaid. This usually takes 3 to 5 years. 

During your debt counselling period, you’ll be protected from creditor harassment, you’ll have access to more cash flow, and you’ll learn a lot about finances and budgeting too!

Why making every debt repayment is so important 

Making your payments allows you to keep all your benefits - like lower interest rates and fees and legal protection. If you don’t pay, you’ll lose access to these and will have to pay the original amounts, making repayments a lot harder (as you’ll know from experience). 

Consistent payments also ensure that you remain on track to your goals of being debt free and securing your financial future. 

What will happen if you miss one repayment? 

When you miss a payment (if you’re doing debt counselling with DebtBusters), somebody from the collections team will contact you. Their aim will be to understand what has happened and how they can help to ensure that your payments are made. 

If you continue to miss payments for three consecutive months, you will be suspended from the debt counselling program. Thereafter, you’ll have 10 days to make the payment for arrears. If you still do not make the payment, you will be withdrawn from the debt counselling process.

You will still be flagged at the credit bureaus as over-indebted and will not be able to take out any additional credit or loans. And, you will no longer benefit from lower interest rates and fees, or legal protection. This means creditors may start calling you, looking for their payments. 

What to do if you think you will not be able to make your next repayment? 

If you are struggling to make your monthly payments, it is best that you contact your debt counsellor immediately. This is so that they can advise the credit providers of your situation and work out a more affordable debt repayment plan. 

Both your debt counsellor and your creditors are willing and able to help! You just have to be open to sharing your circumstances with them, in a timely manner. 

 Should you need assistance with your debt, contact us!