How To Handle Your Bond In Arrears

Posted August 15, 2010 – 5:30 am in: Mortgages
     

During hard times, you can sometimes face overwhelming debt. This can make it very difficult to keep up with all your bills.

If you fall behind on bond payments though, the results can be catastrophic. In fact, you will probably lose your property. However, people who find themselves caught in such a situation can find help.

One way of doing that is with Debt Counseling. This program was developed to help consumers who simply could not meet their credit agreements and the fundamental living expenses. With this type of program, a debt counselor will negotiate with your creditors, and get reduced monthly payments. Creditors can no longer take legal action once a debt counselor has contacted them. The counselor, working on your behalf, will negotiate with your creditors. They work out monthly payments and usually get interest rates reduced. Debt counselors often charge a fee for their services.

Debt Counseling is one option. This is sometimes called Debt Review. Originally, it was developed to help consumers who could not handle their credit agreements and basic living expenses. With this program, a debt counselor parleys with all the consumer’s creditors, for reduced monthly repayments. Once a debt counselor has established contact with these creditors, they cannot take legal action against you. On behalf of the consumer, the debt counselor negotiates with creditors. They work out reduced monthly repayments, as well as reduced interest rates. Debt counselors usually charge a fee.

Debt settlement is another option. This solution involves negotiating with creditors and credit card companies, to settle on an amount of money to be paid, to consider the account paid in full. Most creditors are willing to settle, even if they do not get all their money. They know that if bankruptcy is filed, they receive nothing.

Debt consolidation is something you might consider. With this option you would take out a loan to pay off several debts that have been consolidated. Usually, the loan comes at a lower interest rate, and you end up with just one monthly payment.

Applying for bankruptcy should really be a last resort. When you choose bankruptcy, the damage to your credit rating is long term. Bankruptcy will require the debtor to liquidate all assets of any value. The money is then used to pay creditors, and any outstanding debt is negated.

Repossession is the real concern, if you are in bond arrears. An illness or layoff can put you behind in bond payments, and that can mean you lose the property when the bank forecloses. You could sell your property to investors, which prevents it from going through repossession. In today’s economical climate, it really is very important to be prepared for emergencies.

A Bond Payment Protection Plan is one way to be prepared. Most insurance companies offer something like this, and it actually protects your bond payment. If you simply cannot make your monthly payment, due to illness or loss of employment, the insurance company makes it for you. If you do decide to go with this coverage, be sure to check any significant information and look over the provisions. Make sure you know what is being covered in the policy, and under what conditions it is covered.

Susan Reynolds is the webmaster for a leading South African bond originator. For more information visit: http://www.bondcredit.co.za/

categories: Mortgage,Finance,Money,Property,Real Estate,Loans,Credit