6 most common debt counselling myths in SA debunked

If you're struggling with debt in South Africa, you may have heard about debt review as a potential solution. However, there are many myths and misconceptions surrounding this process, which can make it difficult to separate fact from fiction.

In this article, we'll debunk some of the most common myths about debt review and provide you with the accurate information you need to make an informed decision about managing your debt.

Myth 1: Debt review will ruin your credit score

Many people believe that entering into debt review will permanently damage their credit score, making it difficult to access credit in the future.

However, this is not entirely true. While it is true that your credit score will be negatively impacted while you are under debt review, it is only a temporary effect.

Once you have successfully completed the debt review process, your credit score will start to improve. In fact, having gone through debt review and showing a good track record of paying off debts on time can actually improve your credit score in the long run.

Myth 2: Debt review is only for those who are completely broke

Another common myth surrounding debt review is that it is only for people who are completely broke and have no other options. However, this is not entirely true.

Debt review is a viable option for anyone who is struggling to keep up with their debt payments, regardless of their financial situation. It is a proactive step towards getting back on track with your finances and can help prevent more serious financial problems down the line.

Myth 3: Debt review is a scam and will only benefit credit providers

Some people believe that debt review is a scam and that it only benefits credit providers. This is not true at all. Debt review is a legal process that is regulated by the National Credit Regulator in South Africa and is designed to help consumers who are struggling with debt.

It’s a way to restructure your debts and make them more manageable while protecting you from legal action by creditors. While credit providers may benefit from receiving payments from consumers who are under debt review, it is ultimately a win-win situation for both parties.

Myth 4: Debt review will not protect you from legal action by creditors

Another myth about debt review is that it does not provide protection from legal action by creditors. However, this is not true.

When you enter into debt review, all legal action against you by creditors is immediately stopped. This means that you are protected from any legal action, including garnishee orders and repossessions, while you are under debt review. This protection is provided by law and is one of the benefits of entering into debt review.

Myth 5: Debt review is a quick-fix solution to debt problems

Some people think that debt review is a quick-fix solution to debt problems and that it will magically make their debts disappear overnight.

This is not true. Debt review is a process that takes time and effort and requires a long-term commitment to sticking to a budget and making regular payments towards your debts. It is not a quick-fix solution, but rather a proactive step towards getting your finances back on track.

Myth 6: You can't take on any new debt while under debt review

Many people believe that they cannot take on any new debt while they are under debt review. While it is true that you cannot take on any new unsecured debt (such as credit cards or personal loans) while under debt review, you can still take on secured debt (such as a home loan or car loan) if it’s necessary.

However, any new debt you take on will need to be approved by your debt counsellor, and you will need to make sure that you can afford the new repayments in addition to your existing debt repayments.

In conclusion, it is important to separate fact from fiction when it comes to debt review. Debunking these common myths can help you make an informed decision about whether debt review is the right option for you.

Remember, debt review is a legal and regulated process that can help you restructure your debts and make them more manageable. It is not a quick-fix solution, but rather a proactive step towards getting your finances back on

So, here’s the deal

Debt review can be a valuable tool for managing your debt and getting back on track financially. However, it's crucial to separate fact from fiction when considering this option.

By debunking these 6 common myths, we hope to have provided you with a clearer understanding of what debt review entails and how it can benefit you.

If you're still unsure about whether debt review is right for you, we encourage you to seek out further information from a reputable debt counsellor or financial advisor. We also encourage you to review our many blog articles and guides to help you make the best financial decisions.