MONEY CLINIC | I entered into debt review a year ago and can't cope - what should I do?

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A reader looking for a temporary fix to his financial problems entered into debt review ill-informed and is now unable to exit until all his debts are paid. He looks to an expert on the next steps to take.

He writes:

I entered into debt review a year ago, and it was the worst decision.

The debt counsellor didn't inform me well at all. In my discussions with the company, I wanted a temporary solution while fixing my financial problems.

I then realised that I was in trouble with no way out when I managed to pay off two out of the four debts I had.

Now, the company will not remove me from debt review until I have completely paid off all my debts.

The interest rates are spiralling out of control. I can't get my kids into the best schools in town. I can't do anything, even though I am paying off my debts every month without fail. I am at a point where I am so depressed and I'm even considering stepping away from my debts completely and coming back after three years, once it's prescribed. Hopefully it will be cleared then. 

What would be the best solution for me?

Neil Roets, founder and CEO of Debt Rescue, responds:

When applying for debt review, it is important to understand that it is a process of reducing your monthly instalments to enable you to pay your necessary living expenses, while extending your repayment terms.

It is also to ensure that debt is repaid and to become debt-free in the end. The best advice would be to speak to your debt counsellor to see how you can settle your debts as quickly as possible.

Explain to them that your financial circumstances have changed and that you wish to pay more towards your debt, to enable you to pay the debt off as quickly as possible.

If you are to stop paying your debt, it will affect your credit score and possibly lead to legal action, which will have a negative effect in the long term.

If you are able to settle any of the debts, contact the credit provider and ask them if they give settlement discounts.

Questions may be edited for brevity and clarity.

  • Have a money problem that needs solving? Fin24 can help! Send your question to editor@fin24.com

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