The reality that you are over-indebted can be an awful realisation. Once this sinks in, be assured that there are steps you can take to help yourself – you can decide to apply for debt review. You may have some uncertainty about the debt review process – here are three do’s and don’ts of debt review, to help you understand what you will be undertaking:
Debt Review Don’ts:
Don’t think that this is a Consolidation Loan. Your debt counsellor restructures your existing debt into a more reasonable repayment, depending on your affordability. Your creditors will have you on their records until the paid-up letter is issued. No further credit may be granted until clearance is finalised with credit bureaus.
Don’t make the mistake of thinking that you can get a discount or pay less than you owe. Although interest rates instalment amounts are reduced, these are concessions granted by creditors under the Regulations governing the National Credit Act. Creditors expect their pound of flesh – you will be paying off all your debt.
Don’t assume that you will be stuck in debt review for 5 years. Five years is a guideline and may not be exceeded, but invariably your finances will improve sometime in the future, at which point you may increase your payment. In our experience, most clients finish debt review from between two to four years. It’s up to you!
Debt Review Do’s:
Do check your debt counsellor’s credentials – Make sure that you are speaking to a Registered Debt Counsellor and not an unqualified call centre agent. Ask for testimonials from other satisfied clients. Once registered under debt review, you remain there until Clearance is issued.
Do ask lots of questions. Debt review can be a complicated process, but it doesn’t have to be – a qualified, Registered Debt Counsellor will be able to guide you through every step of the process. After your initial discussion, more questions may arise. Build up a relationship with your Debt Review Practitioner. They will be sorting out your financial problems for you.
Do realise that the debt review process is a commitment that is for the long-haul. Be sure you actually want to settle your debt before signing up. Always keep up your payments: as long as you are paying, your debt counsellor can support you.
Being in debt can be a frightening position to be in, but as you can see, knowledge about the debt review process can really help you to take that first step towards becoming financially free. If you are finding yourself in the harsh reality of being over-indebted, don’t delay: speak to a Registered Debt Counsellor today!
If you would like to speak to a Registered Debt Counsellor about your next step, contact Karin Augustyn here. You can also phone us on 021 828 2100 or 073 903 6942.