Is Debt Review Extreme? Weighing It Against the Alternatives

If you’re reading this, chances are you’re feeling the weight of mounting bills, juggling multiple repayments and wondering if there’s a way out. You’re not alone. 

In South Africa, many hard-working citizens are seeking effective debt solutions to regain financial stability. Among these, debt review stands out – not as an extreme measure, but as a practical, safe step towards financial freedom. 

A Positive Step Forward

Debt review, also known as debt counselling, is a legal process designed to assist over-indebted individuals. It involves a thorough assessment of your financial situation by a registered debt counsellor, who then negotiates with your creditors to restructure your debt into a manageable repayment plan. This process ensures you can meet your basic living expenses while systematically paying off your debts.

One of the significant advantages of debt review is the protection it offers against asset repossession. Once under debt review, creditors are prohibited from taking legal action against you, provided you adhere to the agreed-upon repayment plan. This means your home, car and other valuable assets are safeguarded. 

Debt Review vs. Debt Consolidation Loan

It’s essential to differentiate between debt review and debt consolidation loan. Debt consolidation loan involves taking out a new loan to pay off multiple existing debts, combining them into a single repayment. While this can simplify your payments, it often requires a good credit score and may not be feasible if you’re already overindebted.

In contrast, debt review doesn’t involve taking on new debt. Instead, it restructures your existing obligations into a single, affordable monthly payment, often with reduced interest rates. This approach is particularly beneficial for those who may not qualify for additional credit and need a structured plan to regain financial control.

The Positive Impact of Debt Review

Far from being an extreme measure, debt review has proven to be a lifeline for many South Africans. According to a report by the Department of Trade, Industry and Competition, over 1.2 million consumers are actively under debt review, collectively paying back approximately R1.1 billion each month. 

This not only aids individuals in regaining their financial footing but also contributes positively to the broader economy.

Moreover, the process instills financial discipline, as individuals learn to manage their expenses within a structured framework. Upon successful completion of the debt review process, clients receive a clearance certificate, allowing them to start afresh with a clean credit record.

Is Debt Review Right for You?

If you’re struggling to keep up with your debt repayments, facing the threat of asset repossession or simply seeking a structured path to financial stability, debt review could be the solution you need. 

It’s not about admitting defeat; 

It’s about taking proactive steps to secure your financial future.

At Zero Debt, we understand the challenges you’re facing and are here to guide you through every step of the debt review process. Our experienced, compassionate consultants will work with you to develop a tailored repayment plan that aligns with your financial capabilities, ensuring you can meet your obligations without compromising your quality of life.

Take control with Zero Debt’s expert debt solutions today!

FAQs and Answers

1. What is debt review in South Africa?
Debt review is a legal process that helps over-indebted people restructure debt into affordable payments while protecting their assets.

2. Does debt review mean I take out a new loan?
No, debt review restructures what you already owe. You do not need to apply for a new loan or take on additional credit.

3. How does debt review protect my assets?
Once under debt review, creditors cannot repossess your assets or take legal action if you stick to the agreed repayment plan.

4. Who qualifies for debt review?
Anyone who is over-indebted and has a regular income to cover living costs plus a reduced debt repayment can apply.

5. Is debt review better than a consolidation loan?
Debt review is better for over-indebted people who can’t qualify for a loan. It doesn’t rely on credit checks or taking out new debt.

6. How long does debt review take?
The length depends on your debt level, but many people complete the process within 36 to 60 months and receive a clearance certificate.

7. Does debt review affect my credit record?
Your credit record is flagged during debt review, but once completed, you receive a clearance certificate to restore your credit status.

8. Can debt review help me manage living expenses too?
Yes, your plan is structured to cover living costs first, so you repay debt realistically without sacrificing basic needs.