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Is Debt Review Easy or Hard?

Many consumers who are contacted by salespeople promoting debt review are told that debt review is not only a good way to repay your debts manageably each month but also very “easy“.

If debt review is so easy then why have over 600 000 people started the process, over the last decade, only to drop out without completing their debt review?

Debt Counsellors Do All The Hard Work

When a person enters debt review then their Debt Counsellor will take on a lot of duties that will greatly reduce the consumer’s stress levels. The Debt Counsellor will talk to all the credit providers, The Debt Counsellor will brief the Attorneys, the Debt Counsellor will even go to court if needed to give the Magistrate information. The Debt Counsellor will prepare documents, make calls and emails they will do all this so that the consumer does not need to. Great! Having someone help you with tall that rather stressful stuff does make things easier.

Making use of a Payment Distribution Agent (as most people do) means that consumers can make a single monthly payment and not have to sort out exact payments of exact amounts each month to credit providers in new and different accounts with changed reference numbers etc. One payment – easy.

A core idea of debt review is to help consumers make a smaller, more manageable and consistently reliable payment each month (rather than unrealistic figures that are not sustainable).  A smaller monthly debt repayment figure is certainly easier.

So, what’s so difficult about debt review?

Consumers Need A New Mind-Set

The hardest part of debt review seems to be changing the way we deal with spending and the way we think about our needs and wants.

what’s so difficult about debt review?’

Before debt review, consumers will often live on credit, using their credit card daily, never saving for anything, seldom holding off making a purchase that they feel they really want. This has become their “usual” way of doing things. If they want it, they get it. If they need it then they are able to get it right away because they simply use more and more of their credit. They have fallen into the habit of instant gratification. No waiting and certainly no saving up for things.

A Changed Mindset

Because credit providers are willing to make such amazing concessions to help consumers they also want to see that the consumer has changed their lifestyle and cut back on costs to ensure the debt is settled in a reasonable time frame. Making changes of this nature can be really hard for consumers who for years have lived beyond their actual means.

This is, in part, the change from a credit lifestyle to a cash lifestyle. You can only spend what you have set aside for something.

A cash lifestyle means no reaching for the credit card when you cannot afford something right now. Even if you really need it right now, you will probably still have to wait and save towards a necessary expense. No instant gratification.

Rather, consumers have to wait, have to save, have to make changes to the way they shop, the way they spend, the way they think about what they can and can’t have.

This is not easy. In fact, this is very hard.

Why People Fail

Waiting for things that we want or actually need is hard. This is why people began to offer credit in the first place. So, we can get these things now and pay for them later (and so they can make a huge profit by charging interest, of course)

It is in this area that most consumers who leave the debt review process have failed.

‘Waiting for things that we want or actually need is hard’

They decide to prioritise a perceived need (or want) over making the required monthly debt repayment. They have probably done this with many of their other debts in the past (before debt review) and think that, like in the past, this will be fine.

They are of course very wrong. When a person in debt review misses a payment it breaks the process and they will lose all the benefits that the debt review has brought them in the past. Then once that has all come crashing down on them they will probably be upset with the process or even their former Debt Counsellor (even though they will have been warned). 

Another reason can be that they may feel the required repayment amount is not possible for them. They may feel it is too much for them to pay each month and still live how they want to live. This will probably be true if they have not taken steps to massively cut back on their monthly spending when they started the process. People hate change and changing where we live and how we live and how we shop or what we give our family requires big changes. 


Is Debt Review Easy?

The technical and procedural side of debt review is fairly easy for consumers. They may have to just sign one or two forms and send one or two emails. That’s easy. Paying less each month towards their debt, while getting help from a trained professional, is certainly also easy.

‘make the process work for you and enjoy the many benefits of debt review’

Making lifestyle changes over a long time (years) is not easy. If you enter debt review this will be the area where you are most challenged. If however, you are able to make the mindset change then you will be able to make the process work for you and enjoy the many benefits of debt review. It can and will change your financial future.

So, in answer to our question: Is debt review easy?

Yes, debt review is easy but…it is also hard.