What Happens After You Finish Your Debt Counselling?
So, your debt review is over. All your debts are paid up. Now what?
At the end of the debt review process, your Debt Counsellor will contact each credit provider who was involved in your debt review. They will ask for a letter showing that your debt has been paid up.*
They will then use those letters to confirm with the credit bureaus that your debts are settled and will issue you (the consumer) and the credit bureaus with a Clearance Certificate (also known as a Form 19).
This will then clear the debt review “flag” or note from your credit report.
They will also update the NCR who have a database which speaks to the credit bureaus as well.
You Have Your Clearance Certificate, Now What?
Well, you have two opinions regarding credit:
Avoid making use of credit as you have for the past 5 years or so.
Though this is definitely the less popular option, it is one that protects you from fees and charges associated with using credit.
Immediately run out and grab as much credit as you can again.
This is the option that most people chose. They feel that they now need to spend money they have not earned yet. Many consumers who have a vehicle desire to replace their now much older vehicle and get something newer.
You Deserve Nice Things
If a consumer under debt review has been paying (eg) R4000 a month towards their debts they will now find that once the debt review has ended they have a lot of extra available cash on hand. The urge to spend it all is going to be massive.
Besides, it is probably time to treat yourself and your family to some of the things that you have been missing out on – movies, presents, toys, new phones and trips. This is natural and not necessarily a bad thing. You deserve nice things.
All that your Debt Counsellor can tell you is to use the patience and training that you developed during your debt review.
‘Make sure that the debt review listing is now gone’
If you need to make a big purchase such as a car or home, then you should first draw a credit report and score and see how your credit rating looks (as this will determine how high the rate on the credit can be). Make sure that the debt review listing is now gone. If it is still there be sure to let your former Debt Counsellor know and they will help you sort that out. The credit bureaus are not perfect and do make mistakes.
Don’t Be Lazy
When shopping for new credit do not be lazy. Different credit providers charge different rates and have different fees. Shop around and get the best possible deal and make 100% sure that you have budgeted the expense in each month for the years to come. Do not fall into traps that you have fallen into before.
Do not overextend yourself and try to not rush into taking on lots of debts immediately after you finish your debt review. Why not wait a few months?
Perhaps you could look to make use of smaller credit facilities for a little while and watch how you handle them. If you see that you are not paying off the credit quickly and the amounts you owe are growing again then reduce your spending and focus on settling the debt.
This will help you build up a better credit score as well, which you may find helps when it is time to look at, possibly, taking on bigger debts like a vehicle or home loan.
‘you can always go to your former Debt Counsellor… for … help to make up a new budget’
Need A Little Help?
Remember you can always go to your former Debt Counsellor and pay them for a once off review of your situation and help to make up a new budget.
They may also be able to point you towards other ways to make use of your disposable income (such as investing etc) and get you in touch with the right people to help you build future wealth for yourself and your family.
*they may also do this as each account is settled along the way