Debt review can be a lifesaver for South Africans stuck in debt. Debt review is a great way to organize your debt and make your repayments more manageable.
You are taking steps towards debt management and living a debt-free lifestyle by initiating the debt review process. Just so you are clear, a debt review does not put a dent in your credit report. It is an intelligent step towards financial freedom.
This post will explain what debt review is and the many benefits it offers. It will also cover why South Africans with high levels of debt should consider this route if they want to get rid of their debt.
What is debt review?
A debt review is a process that helps South Africans who have a lot of debt and are having trouble managing their finances. Also known as debt counseling, debt review can also be called “debt management”. The National Credit Act (NCA), which introduced debt review, was intended to protect consumers from being placed in personal administration and to help them deal with the long-term consequences of their debt.
To ensure that South Africans with high levels of debt are able to achieve financial freedom, counseling was also introduced.
Counselors help clients with debt review to determine their debts and create a debt repayment plan that is fair for all. The debt review involves renegotiating interest rates and creditors to reduce or extend debt repayment terms.
Debt review is simply a smart process that allows debtors the opportunity to turn over their debt negotiations to a professional counselor. A debt counselor is your go-to person for compiling your debts, taking a look over your income, and helping you to create a payment plan that covers your installments and other interest options with creditors.
After all of that is done, the debt counselor will negotiate with your creditors. The best thing about the debt review is that it helps you to make your debt more affordable and protects you from legal action, asset repossession, harassment, and other forms of creditor harassment.
What are the benefits of debt review?
There are many exciting benefits to debt review that you shouldn’t miss. We have highlighted some of these benefits.
- You can pay one monthly installment, which is affordable, for all your debts with debt review. This is so cool! We should also mention that debt review allows you to receive reduced installments from all creditors as well as lower interest rates.
- You no longer need to deal directly with creditors with debt review. The debt counselor will handle communications with creditors so that you don’t have to deal constantly with harassment and threats.
- Your debt counselor will work with you to negotiate a reasonable and structured repayment plan with your creditors. There will also be an exit date when you can get out of debt review.
- South Africans who are over-indebted can have their debt reviewed to make it possible to have enough money for their daily living expenses.
- The goal of the debt review is to make you debt-free again and allow you to apply for credit.
You’ll be delighted at how simple it is to sign-up for debt review for South Africans who are heavily indebted. We will soon be discussing how debt review works.
What is the process of debt review?
Although debt review can seem complicated, especially for someone who is just starting to learn about it, there are some things you can do. For your convenience, we have broken down everything into simple steps. These are the steps that we have compiled to explain how the debt review process works. To get started, click here: Debt review and complete the form.
Step 1: A debt counselor will examine your financial situation and create a debt profile.
Step 2: The debt counselor gathers all paperwork and conducts a formal review of your debt.
Step 3: Contacting creditors and negotiating a repayment plan that works best for everyone
Step 4: A debt counselor will then add you to the National Credit Bureau’s NCR Debt Help Database.
Step 5: The NCR notifies all credit bureaus you have signed up for debt reviews.
Step 6: Next, the debt counselor will negotiate with creditors to agree on a repayment plan.
Step 7: After your creditors agree to the repayment plans, a consent order will issue.
Step 8: With peace of mind, you can begin to pay off your debt.
What does it really cost to review your debt?
The National Credit Regulator established the fees for debt review. This means that you won’t be charged more or lower fees. The NCR Fee Guideline is also followed by most debt review companies you do business with. The fee is part of the debt review process. It is paid directly by the PDA to your preferred agency. The PDA will immediately start paying your creditors once the fee has been paid. Transparency is key, and you will see the fee in the debt restructuring plan that was issued to creditors.
Can I exit debt review?
Anybody can end debt review before the 17.2 notice is issued. To that end, you can send a written instruction to the debt counselor. The 17.2 notice will also change the exiting procedures. Your debt counselor will have confirmed that you are in excess of your creditors’ credit limit. You’ll need to file a formal court application to show that you are not. A debt counselor will only remove your debt review from credit if you win this application.
Failure to follow the process will result in a debt review status remaining on your credit report until you are able to repay all of your debts.
When can I get certified debt-free?
After you have paid off all of your debt except your bond, your debt counselor will issue you a Clearance Certificate confirming that all of your debt has been paid off. After you have paid off all your debts and received a clearance certificate from your debt counselor, you can apply for credit.
Remember that once all of your debt is paid off, there’s no rehabilitation period. You can now take out new credit if needed.
What are the downsides to debt review?
- After you submit a debt review application, you cannot get out of it without paying off your debts or making an application to the court to show that you aren’t over-indebted.
- You are not permitted to apply for any additional credit during the debt review process. This means that you can’t use credit cards, store cards, or apply for loans during the process of debt review. Once you’ve completed the debt review process, you can apply for new loans.
- Your commitment is required to debt review. You cannot miss any payments. Your creditors will pursue all legal actions to recover their money if you default on any payment.
- Incompetent debt counselors are always a concern. Make sure you only do business with reliable debt counselors before applying for debt review.
Notice: Although debt review is intended to help you out of debt and make sure that your creditors are paid, it also allows creditors to meet you halfway. They are willing to accept extended payment terms and lower interest rates.
Debt review is a smart way to get South Africans who are in too much debt out of debt and allow them to take control of their finances.
What happens if my entire debt review is not paid?
If you are unable to pay your debt repayment plan, fall behind on your payments, or do not make any payment at all, your creditors will have to sue you to recover their money. To be completely honest, this scenario must be avoided at all costs.
The debt review process can be a lifeline. You have the opportunity to negotiate your debts and agree on a monthly payment. The debt review process protects you against any legal action or repossessions.
If you fail to pay your debt review obligations, creditors may take legal action against you, which could result in the forfeiture of your assets, including your home. You must honor the debt repayment agreement you negotiated during debt review. This will help you and your family avoid unnecessary stress and hardship.
Start your debt review process
Do you want to get the debt review process underway but aren’t sure where to begin? You’re in luck! Fill out the form below Debt Union We will help you from there. Our team of professionals will help you get out of debt faster than you think.