If your debt is overwhelming you and you can't keep up with repayments, it might be time to consider debt review, also known as debt counselling. Here are the key signs to look out for.
1. You're Struggling to Meet Your Monthly Obligations
If your accounts are two months or more in arrears and you find it hard to pay your monthly bills, with your debt constantly piling up, it's a sign you should consider debt review.
2. Final Demand Letters and Legal Action
If you've received final demand letters from your credit providers (also known as Section 129 notices) and you're getting endless calls from debt collectors and lawyers, you're at risk of losing your assets. Entering debt review protects you from legal action like garnishment orders or repossessions.
3. You're Feeling Over-Indebted
When your total debt seems insurmountable and if you don't have enough money left for your living expenses after your loan instalments have been deducted from your net salary, it might be time to seek professional help. Not sure whether you're over-indebted? Use our Debt Calculator to find out.
4. Lack of a Budget
If you lack a structured budgeting plan that works and makes provision for all your debts, and your financial life feels chaotic, a debt counsellor will be able to assist you with drawing up an actionable, realistic budget.
5. You're Stressed and Anxious
If debt is causing you significant stress or anxiety, or affecting your well-being, debt review can help you enter a clear path to becoming debt-free, giving you peace of mind.
Things to Keep In Mind
So you've decided that debt review is for you. That's great — and you're taking the first step towards getting back control of your finances! However, to benefit maximally from debt review, you need to keep the following in mind:
- Legality: You need to make sure that your chosen debt counsellor is registered with the National Credit Regulator (NCR). Debt review is tightly regulated by the National Credit Act (NCA), setting clear and transparent guidelines for the service, and using an NCR-registered debt counsellor ensures that you have the full legal protection that debt review offers you.
- Implications: Understand that under debt review, you won’t be able to take on additional credit. Instead, your debt counsellor will work with you to create a realistic budget that helps you live within your means.
- Costs: Be aware of the costs involved in the debt review process, including the debt counsellor’s fees. These should be explained to you transparently and in detail by your debt counsellor. Costs are tightly regulated by the NCR.
If you seek debt review at the right time, your assets will be protected from legal action, you'll be able to manage your debt more effectively, and you'll set yourself on a pathway to financial stability. Still not sure whether debt review is for you? Read about the advantages and disadvantages of debt review.