Why is it that some individuals would prefer to grapple with their debt all on their own, making little progress and sinking deeper into the quicksand, rather than approach a debt counsellor about going under debt review?

The truth is that many uninformed credit users still have an unduly negative perception of debt review due to the length of time it can take one to become debt free. Some are under the impression that it will put them further into debt as there are fees involved. While others don’t like the fact that they won’t be able to take out any more credit for a few years.

What they don’t realise is that the debt review process was specifically designed to protect consumers, not only from credit providers, but perhaps from their own bad habits as well.  While under debt review, credit providers can’t take legal action against the debtor, while their debt counsellor rearranges their payment plan to ensure that they are able to keep up with their monthly payments, as well as still be able to afford their household expenses.

Those who avoid debt review will inevitably find themselves being issued with a Section 129 Letter, wherein the credit provider will inform the debtor that they have defaulted on their payments, before taking any legal action against them.  After receiving this Letter of Demand, the debtor will only have ten working days to make their payments, before the credit provider sends them a Court Summons.

The alternative to going under debt review is voluntary sequestration, which involves making a high court application, so the debtor will have to hire an attorney for this.  Naturally, this will cost a lot of money – unlike debt counselling fees, as these are regulated by the NCR, who ensures these fees are not too excessive for the debtor.

Plus, while under sequestration, the debtor’s payments and interest rates won’t be reduced, so chances are they won’t have much left in the way of living expenses after paying their monthly debt payment – which is a precarious situation to be in, especially if they are responsible for supporting a family.

If the debtor does not act at all, the credit provider will take legal action against them by way of a forced sequestration.  In this case, they will most likely have to sell all their assets in order to pay off their debts. All in all, avoiding going under debt review presents a rather grim picture for those who can’t afford to pay their credit providers back.

So, if you feel yourself slipping into over-indebtedness, the safest, most cost-effective decision is, of course, to see a debt counsellor without delay!