Consolidation of Debt into a home loan

Pay Plan Solutions has developed a number of solutions by combining different products or services in order to restore consumer financial wellbeing or to achieve certain goals for clients. Every client that consults with Pay Plan Solutions, has a few things in common. They want to restore their credit profiles, become more credit worthy and get rid of debt currently impacting on their lives. They would essentially want assistance with a sustainable budget which will protect their assets such as cars and houses. In this article we are going to take a closer look at a very specific situation and solution involving consolidation of debt.
John and his wife Marlene own their own home, and have been paying the bond religiously for the past 12 years. With the change in the economy, John’s electrical business suffered and he had to close the business leaving him with a rather large overdraft and two suppliers to pay. One of the suppliers, a wholesaler who supplies materials to electricians, became impatient with the repayment plan, and took a judgement against John for the outstanding accounts. Over the last 12 years since he purchased the home, his property has increased in value and the balance outstanding on the bond has come down. Because of his links with the building industry, he has managed to make improvements to his home which have added to the value of the house. With all the work he has put into it, John and Marlene are doing everything in their power to protect their home. It is not only an investment for them, but is hopefully something they can leave to their children one day. If they had to sell their home today, they would easily be able to settle all their debts, however life would become more difficult, as they would then have to pay rent and start all over. Selling a house under pressure might also lead to a lower selling price.
John and Marlene approached all the banks to ask for an extension on their bond in order to settle all their debt, however the banks could not approve their loan because of the judgement that existed on his credit report.
John and Marlene approached Pay Plan Solutions, who decided the best way forward would be to consolidate their debt through one of Pay Plan’s service providers. They settled the old home loan, and paid off all the debt, including the judgement, registering a new Property Consolidation loan. This allowed them to pay one amount to a home loan which gave them the maximum amount to live on while John was settling into his new job. Even though the interest rate was slightly higher than they might have had with a bank, it gave Pay Plan the time and opportunity to remove the judgement from their name and clean up their credit profiles. After nine months, they now had a clean credit profile with only a bond on it. Pay Plan then got quotes from the banks in order to transfer their bond back, and because their credit score improved so dramatically since the bad debt, they qualified for a much better interest rate, which in the long term will save them money.
Well done to John and Marlene, their persistence in trying to find the right solution has paid off.

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