Debt review is a formal debt rehabilitation program that seeks to help consumers who are genuinely struggling to generate enough income to make ends meet. If you are under debt review, it means you have appointed a debt counsellor who has deemed you over indebted and in need of a structured repayment plan. You will have to make a minimum monthly payment to the National Debt Regulator which will then distribute your money between all your creditors. There is no interest or credit charges on any debt under review, so you only pay back what you can afford each month.
How can I get out of debt review in South Africa?
Unless all the accounts are paid up or the consumer becomes entitled to a clearance certificate, the only way to terminate the debt review process, according to the NCR’s Withdrawal from Debt Review Guidelines, is to apply to a court for either the rescission of the debt review order if one was obtained or for a determination that the consumer is no longer over-indebted. There is no automatic expiry date for debt review agreements.
To obtain a court order, you will need to serve all your creditors with the appropriate notice in accordance with the NCR’s notice Requirements for Debt Review Proceedings. attorneys
Is debt Review a good idea?
Debt review is not a way to avoid paying debt, it is a manageable way to pay off what you owe. Those who drop out of the process also don’t enjoy not being able to get new credit until they have finished paying up what they already owe. Only once that is done can they start to use credit again. As with all forms of debt, you need to pay your debt on time and in full
You can only have a single debt review order open at any one time. But you may put in for more than one at the same time. However, it is important that you work on paying off the
How does debt review affect you?
While under debt review, the credit bureaus cannot blacklist you as you are protected by the NCA. Once you have completed the debt review process, the credit bureaus have no permanent record that you have ever been under debt review. Once you’re under debt review, your credit profile is flagged at the credit bureaus. When you are paying off your debt, you must: – Pay all your creditors according to their agreed payment schedule. – Supply copies of the ‘copy’ statements from each lender proving that you’ve paid them on time. – Attach a payment plan when applying for debt review.
How long does debt Review stay on your name?
You might be asking ‘how long does debt review stay on your name? ‘. This usually takes five years as your borrowing history will indicate your default and payment history. At the end of 5 years, you can ask for your name to be removed from debt review. After five years have expired, you can apply for a loan or even an application to buy a house will not mention that you’ve been under debt review.
What are the disadvantages of being under debt review?
The real benefit of debt review is that it can protect your assets from being repossessed by the credit provider. The disadvantage is that you cannot apply for any credit while under debt review and the only way to exit the review is to settle all outstanding debts, except for those related to car and house financing. What is debt expungement? When your name has been removed from debt review, it won’t mean that all references to the debt review have disappeared.
You might not be able to get a reference letter from your creditor as they will issue these with caution in case you default on their account again.