Debt review is a valuable tool that has helped many South Africans. However, it is not without uncertainties and myths that make people question its effectiveness.
Have you ever heard that debt review permanently damages your credit record or that it's only for people with millions of rands in debt?
This article will discuss the most common myths surrounding debt review and share the truth with our readers.
Myth 1: Debt review is only for people with millions of rands in debt.
Reality: Debt review is available to anyone struggling to repay their debt. It is a proactive measure to address financial issues and offers a structured approach to debt settlement. If you feel your debt is getting out of control, debt review can help improve your financial situation.
Myth 2: Debt review will permanently damage my credit record.
Reality: While debt review initially affects your credit rating, it is not permanent. The credit bureau is notified that your debt has been restructured according to your debt review plan. Once you complete your new repayment plan and fully settle your debt, you will receive a clearance certificate. This certificate is submitted to the credit bureau, and your name is removed from the records. Your credit record is then clean, and you can apply for credit again.
Myth 3: Debt review means I will lose my home and car.
Reality: One of the primary goals of debt review is to help you keep your assets, such as your home and vehicle. The outcome depends on your individual circumstances and whether you have received a Section 129 notice from your creditors. If you have received a Section 129 notice, you must apply for debt review within 10 working days, and the counsellor will try to protect your assets.
Myth 4: Debt review is a quick fix.
Reality: Debt review is a gradual process that requires dedication and time. It is not a quick solution but a strategy to achieve long-term financial stability. It involves managing your finances and adhering to the repayment plan created by the debt counsellor and authorised by the court.
Myth 5: Debt review is an expensive service I can't afford.
Reality: The cost of debt review is regulated by the National Credit Regulator, ensuring it remains affordable. The fees are structured and included in your new repayment plan.
Myth 6: Debt counsellors are not trustworthy.
Reality: There are many debt debt review agencies that genuinely prioritise their clients' financial well-being. Choosing a registered and accredited debt counsellor is essential to guarantee high-quality services. Debt counsellors must comply with the strict standards and regulations of the National Credit Act.
Myth 7: Debt review is just another type of loan.
Reality: Debt review is not a loan. It is a legal process where a professional debt counsellor assists individuals in restructuring their debt. It enables individuals to repay their debt gradually over an extended period, reducing their monthly repayments.
Myth 8: I don't need a debt counsellor's services.
Reality: Although it is possible to manage your debt independently, the assistance of a debt counsellor offers access to professional guidance and negotiations with all your creditors. With their expertise and knowledge, debt counsellors can create an affordable repayment plan tailored to your specific situation. During debt review, you are protected from potential legal action by your creditors.
How can we help you?
Let Skuldhulp's counsellors thoroughly examine your financial situation with a free assessment. We can consolidate your monthly payments and reduce your debt for immediate financial relief.
Contact us today!
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