Are you always running out of money a week after payday?

This could be a warning sign that you are completely over-indebted and have too many credit obligations to pay back. It’s never a great feeling when you’ve spent a month slogging away at work, just to find that you have nothing left by the 7th of the month, is it?

Has this struck a chord with you? Is this an all too familiar situation you find yourself in every month?

The good news is that we might have a solution for you.

Debt Review (or Debt Counselling) is a legal process that allows every over-indebted South African to put up their hands and say “I’m in financial trouble and I simply can’t make my full monthly debt repayments any longer.”

How does entering Debt Review going to improve your financial situation?

In a nutshell, a Debt Counsellor is going to look at all your credit obligations (people you owe money to) and work out:

• How much you are supposed to be paying back every month
• How long it is going to take to repay the entire loan
• The interest that is being charged on each loan

That’s the first step in the process and can be done by using your ID number to do an online credit check with a South African credit bureau.

Now it’s time to have a look at your budget to establish where your money is going every month. The role of a Debt Counsellor is to establish how much you can realistically afford to pay back to your creditors every month. 

Let’s take a quick look at an example to make things easier:

Elizabeth is a single mom who financially supports her two small children as well as her mom and dad. She is working 6 days a week to keep the home fires burning, but she is falling further and further behind with her debt repayments.

Her cell phone is constantly ringing, and her creditors are starting to get extremely aggressive and threatening.

Talk about stress and anxiety…

Elizabeth finally decided to get hold of us and after we did a credit check we established that she has 5 credit obligations and is supposed to be paying back a total of R10 000 per month.

The real question is can she afford the R10 000 per month?

After having a quick 15-minute chat over the phone we quickly determined that Elizabeth only has R5 000 per month in her budget to pay back her creditors and meets the “over-indebted” definition laid down by the National Credit Regulator.

After having run through the pros and cons of entering the Debt Review process, Elizabeth decided the option made sense for her. Not only will she be protected from creditors, but we are also saving her R5 000 in monthly repayments which will create a positive cash flow scenario in her life. Something she said was ” absolutely life-changing”

It costs nothing to chat about Debt Review as an option. But failing to address the situation you are in is simply going to compound your problems.

Get in touch with us today by entering your details below.