What is Debt review?
It’s a process that helps consumer who are struggling to meet their debt obligations. A debt counsellor approaches your creditors and makes payment arrangements on your behalf, reducing your payments to a manageable amount monthly.
The role of debt counsellors is primarily to assist consumers who are over-indebted. The debt review procedure that is detailed in section 86 of the National Credit Act allows an over-indebted consumer to seek assistance from a debt counsellor.
How to determine over indebtedness:
According to the National Credit Act, a consumer is over-indebted if his/her total monthly debt payments exceed the balance derived by deducting his/her minimum essential expenses from his/her net income;
In other words, a consumer is over-indebted when he/ she does not have the ability to meet all his/her financial commitments at the end of a month.
So when we determine that you are over indebted, we can begin the process of debt review: The journey to unburdening yourself, taking that financial mess of a mountain off your shoulders, the journey to Financial freedom.
How it will work for you:
Once we have done a consultation with you and analyzed your debt, we will begin to contact all your creditors and negotiate on your behalf a fair and affordable repayment plan. A plan that you can afford.
1. When you apply for debt review, you will complete an application for and submit it together with the details of all your credit agreements to us.
2. We will assess your financial health and determine within 30 days whether you are over indebted.
3. Upon determining that you are over indebted, we will accept your application. We will notify your creditors and credit bureaus within 5 business days of your application by sending them a prescribed form and requesting them to issue a certified certificate of your debt balance and accrued interest of your account.
4. We will then negotiate an interim repayment plan on your behalf and submit it to a registered payment distribution agency (PDA)
5. Within the first 60 days of your application to be put into debt counselling/review, your creditors may not take any legal action against you as your debt is now ‘under review’. Should a creditor already have acted against you, then you do not enjoy legal protection from that specific debt, and it will be excluded from the debt review process, which is why it would be the smarter choice to contact us immediately so we can get you protected.
6. If all your creditors accept your debt counsellor’s repayment proposal, your debt counsellor must obtain a consent order from the National Consumer Tribunal or a magistrate’s court, again within 60 days.
7. Once all parties involved agree to the repayment plan proposed to your creditors, you will pay the money to the PDA and from there it will be distributed to your creditors.
8. Once you have repaid all your debt, you will be issued with a debt clearance certificate and it will in turn be sent to your creditors and to the credit bureaus