How To Prepare for Your First Debt Assessment

The quality of a debt assessment depends on the quality of the information behind it. Most weak plans fail for one reason: the figures discussed were remembered rather than checked. An hour of preparation usually produces a better outcome than a longer meeting without documents.

List salary, business drawings, rent, agricultural income, casual work and remittances, with the amount and the date each typically arrives. Where income varies, note the floor rather than the average, because repayment commitments should be built on income you can rely on.

Bring the payslip, not the remembered net figure. Deductions from wages are governed by the Employment Act, 2006, and salary loans often sit inside deductions that borrowers have stopped noticing. Business owners should separate business cash flow from household drawings before the meeting.

Cover rent, food, school fees, medical costs, transport, utilities and unavoidable business costs. Then add periodic items — term-time fees, medical events, family obligations, annual licences, planting inputs — divided by twelve, because that is how they behave over a year.

Small recurring costs matter. Three months of mobile money statements will usually give a more honest expense profile than memory. FinScope Uganda 2023 found that seven in ten Ugandan adults operate a personal budget deficit, and that most borrowing covers regular expenses — which is exactly what an honest expense list exposes.

For each creditor, collect the name and licensing status, the agreement, the latest statement, the account number, the instalment and due date, the arrears position, any security or guarantee, and recent messages from collectors.

Where records are missing, request them. The Bank of Uganda Financial Consumer Protection Guidelines, 2011 require providers to give a plain-language key facts document, disclose the total cost of credit, explain how interest is calculated, and give a detailed breakdown of recovery costs. Money lenders licensed under the Tier 4 Microfinance Institutions and Money Lenders Act, 2016 must keep records of the principal, the rate and every repayment.

Check two things on every agreement: whether interest is charged on a reducing balance or flat, and whether the contract provides for compound interest, which is illegal and unenforceable in a money lending contract. The money lender rate is capped at 2.8 percent per month, or 33.6 percent a year, according to UMRA.

Request your credit report as well. Credit information is shared through licensed bureaus under the Financial Institutions (Credit Reference Bureau) Regulations, 2022, and reports are accessible to borrowers, as the Uganda Bankers' Association explains.

Note who depends on the income, who has guaranteed which facility, and which assets are jointly held. Guarantors have their own exposure, and providers are required to warn them in writing of the potential liability and to advise them to seek independent legal advice. Providers may not pursue relatives or referees who never signed a guarantee.

A structured conversation, not a judgement. Questions about how the position developed, because the cause shapes the remedy. Some questions repeated, because documented figures and remembered figures often differ.

Expect clarity about limits. Advisory work covers understanding your position, organising information, preparing a realistic repayment plan and supporting communication with creditors. It does not include lending, holding client money, legal representation, insolvency practice, or tax, investment or insurance advice. Where a statutory process under the Insolvency Act, 2011 or court action is involved, the right step is referral to a qualified professional.

Expect a consent discussion before any creditor is contacted, consistent with Uganda's data protection framework, which UMRA's Digital Lending Guidelines, 2024 also reflect for licensed digital lenders.

Plans built on real figures survive. Research on debt advice adherence in the International Journal of Social Psychiatry shows that sustainability matters more than ambition, and a study in the Proceedings of the National Academy of Sciences found that reducing the number of live debt accounts improves decision-making beyond the financial effect alone.

An accurate one-page summary beats a folder nobody has read.

Before your first conversation, gather your income details, household expenses, and creditor records. A confidential first assessment can then turn them into a practical plan.