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The Real Pros & Cons of Debt Review

Some people will tell you that debt review can slash the amount of your monthly debt repayments to all your credit providers, but they may also warn that while you pay off your debt, you will not be able to get more credit.

Are these the true Pro’s and Con’s of debt review, or is it slightly more complicated than that?

Let’s talk about what makes debt review great, but also challenging for some people. Here are the real Pro’s and Con’s of debt review.

A Real Plan

When you are trying to avoid collections calls, and are too scared to open statements and angry letters from credit providers, it can seem impossible to make a sustainable plan to get out of debt.

At best, you might have a plan to try keep as many of your credit providers somewhat happy this month by paying a little to this one or that one. But this is very short term.

When you begin debt review, a professional Debt Counsellor will craft a personalised debt repayment plan to the last rand and cent. They will be able to tell you how many days, weeks and month it will take for you to sort out your debts.

This plan (once ratified by court) is a realistic plan. It’s not some “pie in the sky” dream or wishful thinking, it’s real!

You Can Finally be Honest with your Family

When your debt becomes overwhelming it can be difficult to tell your family, or partner, the full extent of your debt and the resulting stress. After all, you love them and do not want to make them stress.

So, you hide things from them…which makes you feel even worse.

When you enter debt review however, that changes. Now you have a proper plan in place, you don’t have to hide anything anymore. You can be honest in talking about your debt because you now have a realistic plan that is going to work.

This means, no hiding of anything. It means better communication without fear. That will help strengthen your relationships with those closest to you.

A Fresh Start

Starting debt review gives you an amazing chance to do better in life.

We all know that we should be eating better, exercising more, spending quality time with family and looking after ourself. We just don’t do it, but now you can.

Debt review is a clean slate, a fresh start. You can finally break all those bad habits you actually hate and start afresh.

Take Back Control of Your Future

Being deep in debt can feel like sinking into quicksand.

It’s like you are just slowly being overwhelmed, and no matter what you try, things just never seem to work out.

It is frustrating and can leave you feeling stuck, unable to make any progress in life, it robs you of your future.

Debt review can change all that.

Debt review allows you to, almost immediately, sort out the money side of your life so that you can finally start focusing on everything else.

It’s a huge weight off your shoulders, freeing you up to use your time and energy on things to build your future.

Someone to Help You

If you have been stuck in debt and dealing with scary letters, sms’ and calls, it can be overwhelming.

Sometimes you wish you had someone that you could really be honest with, and share your stressful situation, that won’t judge you. Your friends and family might think you have failed in some way and you naturally don’t want to disappoint them or look weak.

One of the best things about debt review is to finally have someone who you can be 100% honest with. Honest about the extent of your debt, the reasons why you are stuck and your feelings of frustration.

Best of all, a Debt Counsellor can give you honest advice (they won’t sugar coat it like your mom might). They know the laws, they know what is and isn’t possible, and they will help guide you through the process.

Amazing Concessions from Credit Providers

We can’t really talk about debt review without acknowledging that the process does give you access to the best department at the banks and credit providers.

These amazing people will often be permitted to offer you amazing discounts and concessions you can’t get elsewhere.

Depending on your unique situation, you could end up not paying any fees on your accounts. You could have your interest rates slashed, and it is likely that you will get to pay off your debt over much longer time than before. That means no outrageous demands for payment every month.

It also means that you should be able to realistically pay off your debt over time, if you stick to the plan. You will have so much less stress and will end up paying a lot less overall than you might otherwise have.

For many people this is the main Pro of debt review.

But…It’s Not For Everyone

There are 10 Million South Africans who are many months behind on debt repayments and who are heavily over indebted.

Debt review has so many Pros, it could solve all their problems.

So, why isn’t everyone in debt review?

Well, there are some things that can hold people back from starting this amazing process. Let’s look at a few of the real Cons (and no, it has nothing to do with a silly listing with the credit bureaus).

You Might Not Have What it Takes

At the moment, around 40% of people who begin debt review each month do not even last 36 months in the process.

Many find the transition to a cash lifestyle, and regular payments simply too hard to manage. They are too deeply addicted to credit, and living beyond their means. They are easily bumped out of the process when any little obstacle comes along.

Of course, the credit providers are more than happy to reestablish all those fees and missed interest amounts so they can make even more money from these consumers.

So, a real Con is that you, like so many others, might not have what it takes to see the process through from start to finish.

You have to Pay Every Month

When you enter debt review, you can no longer just reach for the credit card, you have to plan and stick to your budget.

Because many of us haven’t learnt to do that well, it can be a challenge (even if you do get help from an amazing, helpful Debt Counsellor).

You might be so used to skipping some payments whenever you feel like it, that having to steadily pay on time, every month might actually be too hard for you.

You May Have To Adjust your Expectations

Getting help through debt review can mean lower repayments, longer to pay and a realistic budget on how to make ends meet.

It also means a Debt Counsellor is available to give you quality advice whenever you need it.

But some people get confused about how the process works, and just how much your Debt Counsellor can control.

Credit providers might do unexpected things during the process, that can make you doubt that it is working. The court process can cause delays or stress and you might have expected your Debt Counsellor to be all-powerful.

The truth is, Debt Counsellors have to work within the set of laws and rules about dealing with debt. That can mean that sorting out some challenges can take longer than you would like. That can be frustrating and you may need to adjust your expectations about how quick things work.

You have to Look Deep Inside

Spending money can make us feel powerful. We might feel that our personal worth is linked to the things we own and how we live.

Relationships with money are complicated.

Having to switch to a budget conscious, cash lifestyle might make you feel “less”.  Focussing on paying off debt and holding back from spending, like we used to, can be too challenging for many people, causing them to drop out.

Perhaps getting to grips with what is really important in your life and what makes you happy, is simply too hard.

You Have to Make Real Changes

Entering debt review can give you the chance at a fresh start, but only if you are prepared to make it work.

You cannot just do the things you did in the past, and expect things to work out simply because of debt review.

‘You cannot just do the things you did in the past, and expect things to work out’

You have to sit down and really analyse your life. You might need to change where you live, where you shop, how you spend, the brands you use, the places you go and the way you spend money.

Debt review works best when you fully embrace the process. Those who lean into the process often find they are able to get out of debt faster than planned. By making changes to their lifestyle and spending they not only do better they set themselves up for a brighter financial future.

But the question is: Are you really prepared to make the needed changes?

Most people are not.

The Pro’s & Con’s

Debt review is an amazing process that has literally saved the lives and sanity of hundreds of thousands of South Africans.

For those who qualify, it can help end collections harassment, it can provide a realistic repayment plan that allows for a fresh start and easy planning for the future.

Debt review comes with amazing concessions from credit providers but can also challenge people. It requires real change, adjusted spending behaviour, thinking and lifestyle changes, which some people struggle with.

These are the real Pro’s and Con’s of debt review. If you have what it takes, debt review will free you. If you are scared of the Con’s then maybe don’t start the process, it won’t work for you.