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What is debt review? Five facts you need to know

Debt review is a debt solution which assists over-indebted consumers to take control of their finances. The National Credit Regulator (NCR) is the entity which regulates the process of debt review and the debt counselling industry.

When you are under debt review, a registered debt counsellor ensures that:

  1. You will be able to afford your monthly debt repayments as well as your everyday living expenses.
  2. You will have one lower monthly debt instalment (which covers all your debt).
  3. Your assets will be safe from repossession (if no legal action has been taken before your debt review application).
  4. You will have peace of mind and be able to focus other aspects of your life, besides your debt.
  5. You will eventually pay off your debt and start on your journey towards financial freedom.

Debt review is a debt relief option for those who are committed to becoming debt-free. It isn’t a quick fix, but if done correctly can have a lasting, positive effect on your finances and your life.

How long you will be under debt review depends on your commitment to the process, and how much money you can afford to pay towards your debt every month.

Some people can complete the programme in a few months, others need up to 5 years. Ideally, 5 years is should be the maximum time it takes to rehabilitate your finances.

If your financial situation improves while you are under debt review, you can arrange to pay your debts off even faster.

COVID-19 and the subsequent varying levels of lockdowns have had a devastating effect on almost every South African household. Incomes have been lost, slashed and interrupted, but the world has not stopped turning. After payment holidays granted by the banks, household debt still has to be serviced.

TransUnion’s Financial Hardship Survey in South Africa, released in the last quarter of 2020, showed that almost four in five (79%) consumers reported that their household income had been negatively impacted by Covid-19. The survey also showed that concerns about their ability to pay bills and loans remained high at 85%, with 29% expecting to run into a shortfall within one month.

The struggle of the over-indebted South African consumer is real, and there is no shame in that.

If you are feeling uneasy about your finances, running short of money for everyday living expenses and are taking from Peter to pay Paul, then you should immediately contact a NCR-registered debt counsellor.

Debt counselling and the process of debt review can change your finances and your life, for the better.

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Pioneer Debt Solutions
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