Just like you, millions of other people are struggling financially every single month. South African consumers have been hit hard due to the covid restrictions over the past year and a half.
A recent study by Debt Rescue found that 8 out of 10 South Africans have been financially affected due to the pandemic.
This has led to a widespread financial consumer crisis. To make matters worse, many consumers don’t fully understand – or make use of – government-regulated debt relief programs available to them, leaving them vulnerable and exposed to the risks of arrears and blacklisting.
Many South Africans experienced a salary cut due to the ongoing nationwide lockdown. Others lost their income altogether and are still unable to find financial relief due to ongoing restrictions.
Households who previously had been getting by OK, are now living on less money while trying to keep up with essential living costs and debt repayments.
To rub more salt on our wounds, the cost of food and fuel has risen phenomenally over the past year due to inflation. The cost of fuel alone is 37% more expensive than it was before lockdown.
Money just doesn’t stretch as far as it used to… And millions simply cannot afford all their debt and monthly living expenses anymore.
How do you get out of debt when there is no money to pay off debt?
Knowledge is power. Knowing what legal debt relief options are available to you is the first step.
TransUnion reported that 46% of consumers said that they are past due on one or more debt repayments by at least 3 months.
A large number of consumers are experiencing financial and emotional distress due to the pandemic.
When there simply isn’t enough money to cover the cost of living and debt repayments every month, you may be over-indebted.
But how do you get out of debt when there isn’t enough money left at the end of the month after paying bills and buying food?
Getting out of debt can be almost impossible to achieve without legal help when you are over-indebted. Sometimes it’s not possible to reduce your living costs any further. The only other option is to reduce your debt repayments. To do this, you’ll need a registered Debt Counsellor such as Debt Rescue who can negotiate on your behalf.
Before the National Credit Act came into effect, consumers were vulnerable to credit providers when they could no longer pay.
The Debt Review process was introduced by the National Credit Act (NCA) to offer immediate financial debt relief to over-indebted consumers.
The process was put in place to protect vulnerable consumers from facing bankruptcy (lasts 10 years) and surrendering lifelines such as your home or car. Losing these assets will only leave you in a worse position than before.
Are you struggling to pay off all your monthly debt on time and in full?
Do you find it difficult to cover your basic living expenses?
Are you stressed and anxious about debt?
If so, debt review may be the perfect solution for you.
Here are our 3 most frequently asked questions about debt review
What is debt review?
Debt review, also known as debt counselling, has been highly successful in helping consumers affordably restructure their debt.
The Debt Review process offers immediate financial relief to over-indebted consumers.
The process allows a registered Debt Counsellor to negotiate with creditors and legally lower your monthly debt repayments through a court order. The process is highly regulated by the NCR and protects the consumer from the creditor breaking agreement.
By reducing your monthly debt repayments, you free up income for essential living expenses such as groceries, fuel and electricity.
Debt review legislation is designed to protect consumers. The process ensures you have affordable legal protection from credit providers in the case you become over-indebted.
Debt review is a debt relief solution that offers immediate financial relief. The process helps you pay off all your debt in an affordable manner so that you can enjoy the debt-free life you desperately seek.
The process is ideal for South Africans earning a regular income, and are struggling to afford their monthly living expenses while paying off their debt every month.
If you’re struggling to meet your monthly debt repayments due to the pandemic, get in touch with us today to discuss your options.
Debt Review Advantages
Only pay one single monthly reduced payment
Missing one single monthly debt repayment can negatively impact your credit score and even result in late fees. If you can’t afford your monthly debt repayments, how do you decide which creditor to pay? And how do you keep track of all your payments?
Debt review simplifies this process for you. You’ll only have to make one single reduced monthly debt repayment and Debt Rescue, or your debt counsellor will make payments on your behalf.
To put the cherry on top, your debt counsellor will also negotiate lower repayment terms with all your creditors.
You’ll pay a lower monthly debt repayment towards your debt, so you’ll have more money available for other monthly living expenses.
No more creditors
Dealing with creditors hunting down their payments daily is draining. Harassment from creditors only adds to the financial and emotional stress you’re most likely dealing with.
Once you’re under debt review your creditors are legally not allowed to contact you. Your debt counsellor will deal with all your creditors on your behalf.
This will take some stress and anxiety away from you knowing that your debt counsellor is taking care of your repayments on your behalf.
All your assets will also be legally protected by the NCA once you join the debt review process. That means none of your creditors will be allowed to claim your assets.
Debt Free Process
Debt review ensures that you get out of debt.
Unlike consolidation loans, which is just another form of credit, debt review aims to rehabilitate your finances and debt without adding more credibility to your name.
The process aims to get a consumer out of debt as quickly as possible while still being able to pay for living expenses.
The NCR insists that consumers will have to avoid debt until they complete the debt review process. This measure has been put in place to help you become debt-free as soon as possible. Making more debt is not to your benefit when seeking debt relief.
Once you have paid off all your debt, you’ll receive a clearance certificate within 1-2 months of completing the process. This allows you to rebuild your financial situation from scratch.
Debt Review Disadvantages
You must be a South African citizen
You need to be a South African citizen to qualify. Debt review is a statutory debt relief program introduced to help South African consumers with their debt. You will have to provide a legal ID or passport documentation to qualify for debt review.
You’ll have to earn an income and be over-indebted
The debt review process can only assist consumers who are over-indebted and earning an income.
You need an income to make a reasonable offer to your credit providers when negotiating a lower repayment.
If you’ve experienced a salary cut over the past few months or you’re struggling to make ends meet due to debt and the cost of living, Debt Review may be the perfect solution for you.
Not sure if you’ll qualify as over-indebted? You can use our online debt calculator to help you assess your financial situation.
How long does debt review last?
The short answer to the question is, it’s different for everyone.
There are a few factors that will determine how long it will take for you to complete the debt review process. This may include,
- The amount of debt you have
- How much you can afford to pay towards your monthly debt repayments
- How committed are you to become debt-free
All of these factors play a role in helping you become debt-free as soon as possible.
To help you become debt-free as soon as possible Debt Rescue, or your counsellor, will help make your debt more affordable.
Your debt counsellor will renegotiate with all your creditors to reduce your monthly repayments amounts. The more you pay towards your debt the sooner you’ll be debt-free. When you are in a better position financially, settle your debt sooner by paying more towards your debt and exit the process quicker.
Debt Rescue has helped thousands of South Africans through the debt review process. Please leave your contact information in the form below and one of our friendly consultants will contact you as soon as possible.