When you enter into Debt Review, your creditors are legally obligated to contact your debt counsellor instead of harassing you. You also get the protection that comes from being protected by a law set up in 2008 called the National Credit Act. This act protects against repossessing any assets and prohibits creditors from contacting people who have entered into Debt Review for payments
The short answer: No. Debt Review is not the same as a loan.
The long answer: Debt Review is the process where your outstanding debt will be assessed and a unique plan for you to repay it without taking out an expensive loan. This way, instead of risking losing any major assets because of repossession by credit providers (or worse!), we'll help with negotiation tactics that can reduce interest rates on your accounts so they're easier to manage as well.
When an individual finds themselves in debt, it might feel like a seemingly insurmountable obstacle to overcome. Many who don't know about two ways they can get out of the monthly struggle may not realize that there are options for them such as Debt review and consolidating their loans with debt consolidation loans.
With a consolidated loan, you only have one payment to deal with but do not have the same support structure as when using Debt Review. A consolidation loan is an amalgamation of your unsecured loans from various lenders that can help settle high-interest debts and close accounts.
Debt Review is the process for you to call an experienced debt counsellor who will assess your outstanding debts and work with creditors on a structured repayment plan. The contact point between creditor, debtor, and counselor helps negotiate interest rates that are better than what average citizens can get by themselves but not as good as if they were working directly with their own bank.
When you undergo Debt Review, your debt counsellor will negotiate with credit providers on a repayment schedule that is affordable and sustainable for the individual. The process of negotiation can be time-consuming but necessary to find an agreement that works best for both parties involved in securing payments.
When your debt counsellor rejects a proposed repayment plan from the creditor, they will submit their own proposal and are required to consult with you about it. If this is not affordable, then an emergency meeting of creditors has been called for by law so that representatives can decide on what's best -not only for them but also themselves- in order to avoid financial distress later down the line.
Debt Review is an effective and quick solution for those who are feeling the strain of unmanageable debt. During our first five days, we will assess your financial situation to determine how much you can afford monthly towards repayment while maintaining a sufficient standard of living. We'll negotiate with credit providers to lower instalments and interest rates on your account so that it's easier for you manage day-to-day life without worrying about meeting repayments. You'll have peace of mind knowing that if circumstances change down the line, or if something unexpected happens like illness or unemployment there is room in this plan for these changes too!
The debt review process can be a lifesaver for people who are in danger of losing their homes and cars. For example, if you're being threatened with repossession or auctioning to recoup debts that aren't yours then it's time to speak up!
Most people take 36–60 months to become debt free. That is 3–5 years. Don’t let this scare you off because the end result will be worth it! A lot of people pay off their debts quicker than that under a Debt Review program, so do not give up hope if other methods are taking too long for you.