Last week we had an overwhelming response to our blog post entitled “The 5 misconceptions about the Debt Review process”. More than 3000 people took a couple of minutes to read the article, and we had hundreds of South Africans reach out to us via our WhatsApp Business line to get more information.

Thank you. It reinforces the need for us to keep answering the questions that will help people make better-informed decisions.

In this week’s blog post we are going to tackle misconception number one, so let’s get straight into it.

One of the many untruths making the rounds about the legitimate legal process of Debt Review is that it follows you around forever and that once you sign up for Debt Review it is:

• The end of your life.
• A black mark against your credit score forever.
• Going to ensure that you never get credit again.

Each one of these 3 points is incorrect.

So, here is the truth. While you are under Debt Review you cannot access any additional credit, but that makes perfect sense for several reasons:

• You probably don’t qualify for any additional credit right now anyway.
• Even if you do, should you be looking at taking out another loan?
• It makes no sense reducing your overall debt repayments by as much as 50% and negotiating new deals with your creditors if all you are going to do is keep shopping for additional credit.

Not being able to access additional credit while you are under Debt Review is the only negative about the process. That’s the truth. Once you are under Debt Review and paying back a renegotiated repayment to your creditors, you only have one obligation, and that is to meet your new repayment each month. But the good news is that you can pay in more if you can afford it down the line.

Here’s a quick example:

Jason is currently paying R12 000 per month across five credit agreements that include a credit card, personal loan, and a car. He is under real financial pressure since COVID and after we completed an assessment of his situation, we established that he only has R6 000 per month in his budget to repay his creditors.

He is over-indebted and a candidate for Debt Review.

Jason decides to enter into Debt Review and he starts paying back a massively reduced R6 000 per month to his creditors (a 50% saving each month).

Now let’s assume Jason gets an increase at work and he can afford to start paying back R8 500 per month rather than R6 000. Is he allowed to?

Absolutely, and we would encourage that. The sooner Jason pays up his outstanding debt, the sooner he can exit the Debt Review process.

On average, the Debt Review process lasts around 48-months (but it will be different from one case to the next). During that period, your only commitment is to meet your new repayments that we negotiate with your creditors. At the end of the period, a clearance certificate will be issued by our office and updated with the credit bureau and you will be back in business.

And by that we mean you will be able to apply for credit once again.

Debt Review is a temporary solution and not something that is going to haunt you for the rest of your life.

Please feel free to get in touch with us via WhatsApp if you haven’t already. We are the only Debt Review business in South Africa that has built out a full-fledged advice and service offering via WhatsApp and the clients who have been using our service during the last year are raving about how easy it is to deal with us via WhatsApp.

Click here to start a confidential chat with us on WhatsApp

Many thanks for your time.

Brendan Els

Director

South African Debt Advisors (Pty) Ltd NCRDC 3434