22 =
January 2025

Press Release =

Dear Stephan Stroh =

WesBank

Is debt review the right solution for a fresh =
start in the New Year? =

22 January 2025 =E2=80=93 The New Year often brings plans for =
a fresh start, and for many South Africans struggling with debt, this =
may include a resolution to enter debt review to alleviate financial =
woes.

What is debt review?

Debt review is a legal process designed to =
help over-indebted consumers to attain financial freedom. It involves =
the assessment of the applicant=E2=80=99s financial situation by a =
registered debt counsellor, negotiating with their creditors for reduced =
monthly payments, and restructuring the applicant=E2=80=99s debt into a =
more manageable repayment plan.

The plan is then made a court order, =
mitigating legal action by creditors against the person undergoing debt =
review.

Advantages of debt =
review

Reduced monthly =
payments: Debt counsellors negotiate with creditors =
to lower your monthly instalments, making the debt payments more =
affordable. This can free up much-needed cash flow, especially after the =
festive season spending.Protection from legal =
action: Debt review lowers the risk of legal action =
by creditors, thereby protecting the assets of the indebted person. It =
is important to note, however, that creditors are not always legally =
obligated to halt their pursuit of repayments during the debt review =
process, especially in cases where legal action has commenced before the =
debt review started. Adherence to the repayment plan is, therefore, =
crucial.Single monthly payment: Instead of =
juggling multiple payments to different creditors, you make one =
consolidated monthly payment to a payment distribution agency (PDA), =
which then distributes the funds to your creditors.Lower interest rates: In some cases, =
debt counsellors can negotiate lower interest rates with creditors, =
which can result in great savings in the long run.

=E2=80=9CBefore taking the plunge, though, =
there are several factors to consider,=E2=80=9D cautions Lebo Gaoaketse, Head of Marketing =
and Communication at WesBank.

Disadvantages of debt =
review

Impact on credit record and credit =
score: Entering debt review will negatively impact =
your credit record and credit score. You will be listed as under debt =
review with credit bureaus, which may make it difficult to obtain new =
credit in the future and may also affect the interest rate charged by =
creditors.Additional fees: Debt =
counsellors charge a fee for their services, which can add to your =
overall debt.Lengthy process: Debt review can =
be a lengthy process, sometimes taking several years to complete, =
depending on the amount owed.No new credit: While under =
debt review, you cannot enter into any new credit agreements, except for =
a consolidated loan under specific circumstances.Court order: The repayment =
plan becomes a court order, meaning you are legally bound to adhere to =
it. Failure to do so can result in further legal action.

=E2=80=9CConsidering debt review at the =
start of the New Year can be advantageous,=E2=80=9D says Gaoaketse. =E2=80=9CBy addressing your debt problems =
early, you can avoid further financial stress and start the year with a =
more positive outlook. At this time of the year, people are also more =
motivated to make big changes in their life.

=E2=80=9CBut debt review is a serious =
decision and should not be taken lightly. It is crucial to seek advice =
from a registered debt counsellor to assess your individual =
circumstances and determine if it is the right solution for =
you,=E2=80=9D he says.

Alternatives to debt =
review

Before considering debt review, explore other =
options such as:

Budgeting and Financial =
Planning: Creating a realistic budget and sticking to =
it can help you manage your finances and pay off debt.Debt Consolidation: Consolidating =
your debts into a single loan with a lower interest rate can simplify =
your payments and potentially save you money.Negotiating with =
Creditors: You can try negotiating directly with your =
creditors for lower interest rates or more manageable payment =
plans.

=E2=80=9CDebt review can be a lifeline for =
over-indebted consumers in South Africa, offering a structured way to =
regain control of their finances. However, it is essential to weigh the =
advantages and disadvantages carefully and seek professional advice =
before making a decision,=E2=80=9D says Gaoaketse.

Visit the WesBank Talks =
Finance podcast for more information on managing your =
finances, including managing your debt and avoiding missed =
payments.