06 May 5 Signs You Should Consider Debt Review Now

Debt can feel inescapable. Initially, loans and revolving can feel like a manageable expense and a valuable tool for affording long-term expenses, wants, and needs. However, if you have too many loans and are nearing your revolving credit limit, you may struggle to make repayments.

If you feel like you’re drowning in debt, it may be time to consider debt review. There are five signs you should watch for, including borrowing money to pay bills and repayments, choosing the creditors you pay each month, relying on payday loans, using almost all of your available credit, or not being able to afford to make minimum payments

In this post, we’ll discuss the five signs you should consider debt counselling and how it can help you become debt-free.

Let’s dive in!

5 Signs It’s Time for Debt Review

You should consider debt review if you continue to borrow money to pay bills and repayments, you choose the creditors you pay each month, you rely on payday loans, you’re using almost all of your available credit, or you can’t afford to make minimum payments.

You Borrow Money to Pay Bills and Debt Repayments

Borrowing money to pay bills and make repayments is a surefire sign that it’s time to undergo debt review. This demonstrates that your income is stretched too thin from debt repayments, not allowing you to save or cover emergency expenses. While it may seem like new loans are a good way to pay off old debt, you’re creating more debt in the long run – you’ll have to pay more fees and interest, further indebting you.

You Choose Which Creditors You Repay Each Month

Choosing the creditors you repay each month is another sign you should consider debt review. You’re over-indebted if you pay certain creditors some months and not others to avoid defaulting, and so legal action, because you can’t afford consistent repayments. Debt review can protect you from legal action and lower your monthly repayments.

You Rely on Payday Loans

Relying on payday loans to pay bills or make repayments demonstrates that you have too much debt and should seek help. Payday loans often have exorbitant interest rates, needlessly creating further over-indebtedness. While payday loans may seem like a viable short-term solution, they can cause harmful future financial disarray.

You’re Using Too Much of Your Available Credit

If you consistently near your revolving credit (credit card and store card) limit, you should likely seek help with debt. Credit cards and store cards have high interest rates – the more you spend on your card, the more you’ll pay in the long run, as the interest you pay is calculated on your principal.

You Can’t Afford to Make Minimum Payments

The most blaring sign you need debt review: you can’t afford to make minimum payments. If you have so many repayments that you can’t make some or all of them, you should seek the help of a professional as soon as possible to avoid legal action, such as judgments, garnishee orders, administration orders, or involuntary sequestration.

What’s Debt Review?

Debt review is a legal process wherein a debt counselor negotiates for reduced interest rates, cut repayments, extended repayment periods, and postponed repayment dates. Under debt review, you enjoy full legal protection from creditors. As per the National Credit Act, no one may take legal action against you while you’re under debt review. Additionally, creditors may not reject your debt counsellor’s negotiations, as they must take all reasonable steps to relieve you from over-indebtedness.

Choose LimDebt

For years, LimDebt’s team of expert debt counsellors and legal professionals have assisted South Africans with becoming debt-free. We’re experts in negotiating for reduced repayments, cut interest rates, extended repayment dates, and postponed repayments.

Let us help you – contact us today.