From November 1, 2016, new debt relief laws apply.
On Good Finance’s website you will find information and facts about what the rules mean and answers to the most common questions.
A major change is that the person seeking debt settlement and having a payment space should pay to Good Finance’s payment service every month instead of sending money directly to those who should have paid. The Crown Magistrate then distributes the paid money between all creditors and pays the money once a year.
Fast money is something we all gladly strive to get and with fast loans it is possible. It only takes a few clicks online to apply and get a quick loan granted, then you usually have the money in the account the same day. Of course, this is something that attracts many, especially those in need of money. When wages are not enough or if you get unexpected expenses, then fast loans are close at hand and this is by all means a good solution many times. However, putting yourself in debt involves risks that are important to know.
To settle in debt
When you are in a tight financial situation, it is easy to make spontaneous decisions. When the money is out of the account or if you receive an unexpectedly high bill, an economic panic can occur. It is in these cases that many think in the short term of a quick solution, rather than what the long-term consequences can be. If you are negligent and ignore the risks of debt, you can worsen your financial situation to a disastrous level.
When you settle into over-indebtedness, the situation often worsens very quickly. For each monthly payment that comes, panic increases and it is not at all uncommon for people to take out new loans, only to settle older debts. What happens is that you push the problem in front of you and for every loan you take, the situation gets even worse. If things go really badly, then you come to a point where the situation becomes unsustainable and then it can end with a debt case at Good Finance.
This happens if you cannot pay
The month after you get your loan granted and your money paid out, you get a bill on the installment to be made each month. If you have not been careful or assured that your finances will meet this monthly expense, then you may not be able to afford to pay the bill. Unpaid loans can have consequences in various stages.
1. Unless the monthly payment has been paid on the last payment day, a reminder will be sent to you. There are so-called late interest rates and fees for not paying on time, which further increases your debt.
2. You now normally have 14-30 days to pay the reminder, but if it does not, the bill is forwarded to a debt collection company. A debt collection claim will be sent to you as a warning that you are now about to receive a payment note. Additional interest rates and fees are added, which once again increases your debt.
3. If the debt collection claim is not paid before the last payment date, your debt file will be sent to Good Finance, a government agency. The Crown Magistrate is now reviewing your finances and assets to see what can be directly obtained to settle your debt. If no assets exist but if you have an employment, Good Finance will contact your employer. Part of your salary will then automatically go to Good Finance every month until your debt has been paid.
4. You have now received a payment note which is registered with all credit reporting agencies. In a credit report, this payment note shows that you have had payment difficulties in the past, which can cause you to be denied when you want:
- Borrow money
- Sign up for a mobile subscription
- Buy something on installment
- Sign a rental agreement
- With more…
The payment note is visible for at least 3 years before it is removed from the register.
Tips to prevent over-indebtedness
Make sure you get a good overview of your finances, your income and expenses. You do this easiest by setting a budget. The budget shows exactly how much you have in income and how much you have in expenses. By setting these sums against each other, you get a good idea of how much space you have for possible monthly payments of quick loans and other things.
If the budget shows that you cannot afford to pay the monthly cost of a fast loan, then you should of course not apply for the loan. If your finances are cramped, you should focus on reducing your expenses in this situation, rather than increasing them.