Facts About Debt Review
As an over-indebted consumer in South Africa, you’re most likely stressed out and looking for a solution to repay your debt without getting involved in any legal troubles.
The biggest problem with consumers being over-indebted is that they don’t know what to do once they are unable to make payments to their creditors or on their loans. In fact, people are uneducated about debt and don’t even know how to communicate with their credit providers whatsoever.
That is why consumers tend to turn to debt counselors, who are specifically set in place to offer the option of a debt review to consumers, with the intent to solve their over-indebted problems.
Debt counseling refers to a legal process that aids consumers to repay their debt in an effective manner by offering them a negotiated restructured payment plan. By qualifying for a debt review, consumers will be given a court order to negotiate a payment plan with their creditors and upon completion, be issued a completion certificate.
Facts About Debt Counselling – Everything You Should Be Aware Of
- Debt review applications may be rejected
Debt counselors will review your debt and financial status to check whether you are over-indebted. If you are not over-indebted, you will be issued a rejection letter to resolve your debt by making use of debt review.
- Debt counselors must be registered to offer debt review
Firstly, debt counselors must be registered with the National Credit Act (NCA) to qualify to offer consumers debt review. They are also permitted to be registered with the National Credit Regulator (NCR) and have an NCRDC number, which can be verified with the NCR.
- Debt review will prevent legal action against you
Once you are deemed over-indebted, you will qualify for the debt review process, which will protect you for a 60-day period from the commencement of your application. Once the arrangement is concluded, legal action will still be prevented, should you have complied with the debt review’s terms and conditions.
- Debt reviews aren’t free
A debt review is a service offered by a debt counselor and can cost anywhere between R6,000 to R10,000, which covers several fees, including the debt counselor’s fee.
- Consumers cannot obtain or use current credit until they have been issued a completion certificate
When under debt review, you cannot obtain credit until you’ve been issued a clearance certificate, which is only given upon successfully complying and completing the debt review process.
- During the debt review period, you will be listed with the national credit bureau
When under debt review, you will be listed as under review with the credit bureau for the duration of the entire process is completed. Being listed with the credit bureau doesn’t mean you’ll be blacklisted as it is only temporary.