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Perfection or Disaster?

Have you ever wondered what the entire debt review process from start to finish should look like?

What does a perfect debt review experience look like, and, on the other hand, what does a disastrous one look like?

Let’s take a look.

A Perfect Start

After doing enough online research and talking to people you trust, who have been through the debt review process, you head down to your local Debt Counsellor for a meeting.

Having prepared well, you arrive with all your account statements, bank statements and pay slips. This makes the face-to-face meeting go smoothly. The Debt Counsellor is kind, friendly and informative. Together, you discuss not only the pros and cons but also your particular circumstances. You identify ways to save and change your spending patterns.

After being fully informed, you then fill out the official application forms and a contract with the Debt Counsellor. They set up an appointment the next day to go over the information again and dive even deeper into your budget.

At that meeting, you cancel debit orders, adjust your banking and even get trained on how to handle collection calls.

You receive copies of all the paperwork (including the Form 17.1) and online access to the same information. You file the physical papers and save digital copies just in case you ever need them.

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A Bad Beginning

 

You get a call from someone offering to lower your monthly instalments.

They claim the government asked them to call.

You agree without really understanding and without signing anything. You totally forget about it until one day your credit card suddenly stops working. You panic and try to buy groceries and pay rent using your overdraft. It doesn’t work.

After calling around in a panic, finally one credit provider informs you that you are under debt review. You suddenly remember the phone call and try to figure out what to do next.

After getting hold of the NCR you finally call the Debt Counsellor to find out how you can get out of this mess.

 

A Perfect Plan

Your Debt Counsellor updates you regularly as they receive up-to-date information (COBs) about your accounts.

This is compared to the information you provided and what is on your credit report.

You receive a repayment proposal. To your relief, it runs over 60 months but the monthly amount is manageable, just as your Debt Counsellor had explained.

The next day, you work with one of their team to set up Debicheck payments to the Payment Distribution Agent of your choice and double-check your old debit orders are cancelled.

Over the next few days, your Debt Counsellor updates you on responses from your credit providers. Because the proposal is fair, they all agree.

This means your matter will go through the National Consumer Tribunal as a consent order, which keeps legal costs lower.

You consult with your attorney to prepare paperwork. Most documents are already provided by the Debt Counsellor. You complete and sign an affidavit confirming you are aware of and agree with the restructuring plan.

The attorney and Debt Counsellor upload everything to the NCT online portal. Since it is all done digitally, you don’t need to attend. You get a reminder the day before and, soon after, the good news that the order has been granted. A copy is sent to you for your records.

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Disaster & Frustration

You cannot reach your Debt Counsellor.

Calls are ignored or you get cut off when transferred from staff member to staff member.

Eventually, someone tells you it is too late, you agreed to start the process and have to pay them to continue or pay them even more to leave. You feel stuck so decide to just give it a go and see what happens.

A debit order for one of your credit accounts goes off. This leaves you with even less money than normal. You ask the Debt Counsellors staff what to do and they tell you to cancel your debit orders. They tell you they will try get the payment back but you never hear from them again. You have to borrow money from your mom to make ends meet.

Later, some strange attorney calls asking you to sign forms for court. You were not expecting the call and are suspicious so, you block them, hoping somehow things will just sort themselves out.

Perfect Follow Through

You work hard to stick to your new budget and along the way you discover smarter ways to shop and save.

Living on cash forces you to think before you spend, and you even manage to put aside some savings each month.

Your Debt Counsellor introduces you to an insurance provider who swaps out expensive credit life cover and helps reduce other insurance costs. 

 

With the savings from making the switch, you are able to now pay a little extra towards one of your accounts each month, speeding up your plan.

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Disaster

 

You keep getting calls from credit providers and are confused.

They tell you that your payments have never reached them, even though you have been paying for months.

Eventually, you decide to change your phone number but don’t inform your Debt Counsellor or the PDA. Months pass with no updates since they can’t reach you.

 

 

Perfect Progress

Soon, you settle one smaller account, then another.

You track your progress with PDA statements and compare them with your bank statements. Any differences are cleared up quickly with the help of your Debt Counsellor.

When collections calls come, you handle them confidently thanks to your training. When scammers call, you laugh and hang up.

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Disaster Builds On Disaster

You are frustrated by the whole thing and so one day, when you get a call with an offer to get you out of debt review, you leap at it.

The scammer even offers to help you “get more credit” even though you still have a mountain of debt. Since you haven’t made changes to your lifestyle or tracked your spending, you are getting pretty desperate. You follow their instructions, sign whatever forms they give you and skip payments to the PDA.

You can’t believe when they take your money and disappear. You are so confused. 

Is the debt review over? 

Can your old Debt Counsellor help you now? 

Unfortunately, you can’t even remember their name and can’t find any paperwork from them. 

Maybe you should have been more organised.

 

Success

With less debt stress, you now spend better quality time with your family.

You sleep better, exercise more and even get a raise at work thanks to improved performance. You use the extra funds to speed up your debt repayments and build up your savings.

When life throws challenges like a small car accident, you cover the insurance excess from your savings. Later, you take in a tenant, settle another account and keep building momentum.

You stay in touch with your Debt Counsellor, join their monthly online workshops and read Debtfree Magazine. Your annual review goes well, and they are impressed with your commitment to saving and paying extra.

Another year passes and you stick with the program. This year you get a small bonus and can use those funds to help you get out of debt faster.

‘Before long, you only have a few payments left’

Before long, you only have a few payments left. Your Debt Counsellor works with credit providers to finalise the exact figures.

You make the final payment, and your Debt Counsellor proudly delivers the good news. Not only are your debts settled, but you receive your official Form 19 clearance certificate.

You celebrate with family and friends. Nothing too lavish. You have learned not to spend more than you need to.

Instead of rushing into new credit, you save and eventually put down a large deposit on a good second-hand car.

You have learned so much and come so far. As a family you continue to work together, save and invest. You are now in control and it is all thanks to the perfect debt review.