Do You Know About Debt Review?

There are many South Africans that are struggling with debt, so if you are facing debt that you can’t manage then you are not alone. It is estimated that over 8 million consumers who are credit active are over-indebted. This means that more than half their salary is put towards paying debt and many of these people have missed payments and found themselves in arrears. 

But there is help available to those struggling with debt, so if you are one of them then don’t be afraid to ask for help. 

Debt is What You Owe

Debt is a sum of money that you owe to creditors. If you do not have the cash, you need in your account to buy something then you are able to take out credit in order to buy the thing you want. We use debt to serve our instant gratification need. We are able to get what we want now without having to save and wait to purchase what we want. 

It’s easy to fall into the trap of using credit to pay for things. You may start with one store card and then get a credit card and then another and so on and before you know it, you find yourself in a downward spiral of debt. But there is help out there if you are over-indebted and struggling to keep up with your debt repayments. 

Debt Review is a Solution to Your Debt

Debt review is also called debt counselling and was introduced by the National Credit Regulator as a solution to help South Africans that are struggling with their debt. 

The debt review process involves a debt counsellor that will assess your income, your expenses and your debt repayments, which helps them to understand your affordability. If they find that you are not able to afford your debt repayments in full then your debt counsellor will contact your creditors on your behalf and negotiate lower monthly repayments and interest rates. They will then restructure your debt and create a repayment plan that you are able to afford. 

Your debt counsellor will manage your repayments and handle all communications with your creditors. This will help you to pay off your debt in a manageable way that doesn’t leave you short every month. 

When you enter debt review, you are not blacklisted, but whilst you are under the process, you will not be able to take any further credit. At the end of the debt review process, a clearance certificate is issued that confirms you are debt free. Your debt counsellor will then contact the credit bureaus on your behalf to have your credit record updated and your credit record will not contain any negative information. 

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