Debt Review: Is it Right for You? Part 1

The purpose of this 5-part series is to showcase real examples of debt review in the lives of people just like you.

Debt Review was introduced by the National Credit Act to provide relief to over-indebted consumers, as an alternative to going under administration or sequestration. In principle, no-one should ever be worse off because of Debt Review. But does it really work that way?

Our debt review clients are diverse and come from all walks of life.

Although each debt review client is unique, there is one thing they have in common: they are ordinary people just like you or me, our friends, or our families.

In this series, we will highlight five true client stories, one at a time. Will the story we are about to tell ring true for you?

This is the story of Lauren*, a single young woman who just started working.

When Lauren came to us for debt counselling, she was 22 years old. She was single and living with her parents. After only a year and a half of working as a trainee nurse,  she was already relying on monthly loans to get through each month.

Lauren’s mom is also a nurse and Lauren’s dad works for a local courier company. They are a conservative, responsible, church-going family.  The children have been raised to work hard, plan ahead, and do the right thing .

When I first spoke to Lauren, she felt suicidal at the extent of her debt.  She had two furniture accounts, one clothing account, a gym contract, a cell phone contract, three bank loans, 1 month-to-month loan, and five funeral policies. Her total indebtedness was forty-five thousand rand. Her monthly salary was four thousand rand.

“I kept receiving offers and promises and I couldn’t say no. I bought a bed, then a TV. Then I had to take a loan to pay them off. Then Edgars offered me specials on a top-up for my medical aid, and promised me a replacement for my broken cellphone screen if I paid cover for three months.”

~ Lauren*

At the time, the entire monthly repayment on her clothing account was going towards various policies and insurance cover, most of which were unnecessary and even fraudulent. How many times can a young, healthy, unencumbered 22 year old die?

“I could never have paid up my debt on my own. The creditors just ignored me. They pretended to be experts, but I don’t think any of them knew what they were doing. No-one would take responsibility. I was just crying all the time before my debt counsellor started helping.”

~ Lauren*

Lauren reports that the biggest challenge prior to starting her Debt Review journey was trying to sort it out on her own and getting nowhere. She was at the mercy of the credit providers and felt frustrated and helpless. Several times she tried to speak to Edgars to get information and confirm balances, but they never provided her with statements, despite their many promises.

Fortunately for Lauren, her employer offers a comprehensive, face-to-face wellness programme with Cape Debt Clinic. She was referred for Debt Counselling when her work performance deteriorated and she called on the social worker in depseration. When we first met Lauren, we estimated that she would be debt free by her 27th birthday, but within two years, Lauren’s finances improved and she started paying more towards her debt review.  We issued her Clearance certificate on 1 February 2019 – 4 years and 4 months after applying.  So she was debt free by her 26th birthday!

“My Debt Counsellor encouaged me to speak with my parents and request accurate, up-to-date statements from my credit providers.  It was such a relief to see that there was a solution and to take that first step. I know this process is going to be difficult, but I am excited to be starting on a way out. It means so much to me. I will be eternally grateful for the support I have had from my employer and my Debt Counsellor.”

~ Lauren*

No situation is that bad that one should suffer so. With a bit of counselling and a good, strong reliable budget with a fair repayment arrangement to creditors, it can be done. It worked for Lauren, what about you?

Did you find Lauren’s story relatable?

Perhaps you are finding yourself in a similar situation. Or perhaps, you don’t see yourself in Lauren’s story at all. Be sure to check back in a weeks’ time, when we will publish another story from a totally different client.

*To protect Lauren’s* privacy, we have not used her real name.