How to Power Through Debt Review and Reclaim Your Finances

Debt review, also known as debt counselling, is a life-saving process for individuals overwhelmed by debt. It allows you to regain control of your finances, by providing a structured and affordable repayment plan. While the goal is to provide relief, many people seek to finish the debt review process as quickly as possible to regain financial freedom. 

Fortunately, there are steps you can take to accelerate the debt review process and reduce your repayment time. Below, we share tips to help you get out of debt faster.

1. Stick to Your Repayment Plan

Consistently adhering to your repayment plan is the most important step in completing debt review. Missing payments or failing to meet deadlines can significantly extend your debt review period. Once you’re enrolled in debt review, your debt counsellor creates a payment plan tailored to your financial situation. Here’s how to stay on track:

• Create a Budget: Take the time to put together a solid budget to help you track income and expenses, ensuring you never miss a payment. If this is an area you struggle to stay organised in, speak to your debt counsellor and reach out for emotional support from a financially literate friend who will help you align your goals with your spending habits. 
• Automate Payments: Set up automated payment to the PDA to avoid missing deadlines and incurring additional fees. This is a great way to avoid the temptation of overspending before your bills are paid. 
• Cut Back on Non-Essentials: Free up extra money for debt repayment by cutting back on unnecessary spending like subscriptions you hardly use or dining out. By making these lifestyle changes, you’re setting yourself up to make better decisions when you’re financially free again. 

Pay More Than the Minimum

If you want to get out of debt faster, paying more than the minimum amount required each month can make a huge difference. Even small extra payments can help reduce the amount of interest you pay and shorten your repayment period.

How to Do This:

• Make Lump-Sum Payments: If you receive a bonus or windfall, use it to make a lump sum payment toward your debt.
• Round Up Your Payments: Instead of paying the exact minimum, round up to the nearest hundred or thousand, whichever is in your means.

2. Increase Your Income

To make larger payments and pay off your debts faster, increasing your income can be a game-changer. Extra money can go directly toward paying down your debts more aggressively, helping you finish debt review faster.

Ways to Earn More:

• Take a Side Job: Consider freelance work, part-time jobs, or gig economy opportunities like ridesharing or food delivery – at least until your debts are paid. This will help you bridge gaps in your budget and make it easier to stick to your repayment schedule. 
• Offer a Service: If you have a skill, such as writing, graphic design, or tutoring, consider offering your services to others for a fee.
• Sell Unused Items: Take this period of growth as an opportunity to declutter your home and sell items you no longer need, such as electronics, furniture, or clothing.

3. Stay in Close Contact with Your Debt Counsellor

Your debt counsellor plays a vital role in ensuring that the debt review process goes smoothly and efficiently. Regular communication with them will help you stay on track and make any adjustments if needed. 

Some of the benefits of staying in touch include: 

• Progress Monitoring: Your debt counsellor can help assess if you’re on track to finish the process sooner and suggest ways to speed things up.
• Resolve Your Issues: If you encounter problems with creditors or need advice, your counsellor can provide guidance.

At the end of the day, being proactive with your debt counsellor ensures there are no surprises or delays, helping you reach your goal of becoming financially free.

4. Avoid Taking on More Debt (Loan sharks and informal loans)

One of the most important factors in speeding up the debt review process is to avoid accumulating more debt. It will only extend your debt review period and create more financial stress.

Some tips for avoiding additional debt include: 

• Sticking to Cash: Use cash or debit for purchases to avoid adding more debt.
• Avoiding Temptations: Stay away from stores, online shopping, or other triggers that may lead you to buy items you don’t need, especially when you’ve just been paid.
• Building an Emergency Fund: Having an emergency fund can help cover unexpected expenses without resorting to credit.

The Debt Review process is a lifeline for those who need to regain control of their finances, but it can feel like a long journey. The good news is that by implementing the strategies outlined above, you can significantly speed up your progress. 

Stick to your repayment plan, make extra payments, reduce unnecessary expenses, and avoid taking on more debt. Find ways to increase your income and stay in contact with your debt counsellor. 

Contact Zero Debt today to speak to one of our registered counsellors about the Debt Review process. With determination and discipline, you can leave debt review behind and achieve financial freedom sooner than you might think.

FAQs and Answers

1. What is debt review?
   Debt review, also known as debt counselling, is a process that helps over-indebted individuals regain control of their finances by arranging a structured, affordable repayment plan. It protects your assets under the National Credit Act.
2. How can I stay on track with my debt review repayment plan?
   Create a joint budget, automate payments, and cut back on non-essential expenses to ensure you meet your repayment obligations on time.
3. Can I pay more than the minimum during debt review?
   Yes, paying more than the minimum amount, such as making lump-sum payments or rounding up payments, can reduce interest and shorten the repayment period.
4. How can I increase my income to pay off debt faster?
   Take a side job, offer services like tutoring or graphic design, or sell unused items to generate additional income for debt repayments.
5. Should I stay in touch with my debt counsellor during debt review?
   Yes, maintaining regular communication with your debt counsellor helps monitor progress, resolve issues, and make necessary adjustments to stay on track.
6. What should I avoid during debt review?
   Avoid taking on new debt, such as loans or credit card purchases. Stick to cash or debit payments and focus on building an emergency fund.
7. How long does the debt review process take?
   The duration depends on your repayment plan, but sticking to your schedule, making extra payments, and avoiding new debt can speed up the process.
8. What services does Zero Debt offer to help with debt review?
   Zero Debt provides registered debt counsellors, tailored repayment plans, and ongoing support to help you regain financial freedom.