Once you have successfully applied for debt review and you now have a legal restructured payment plan in place, which your debt counsellor would have administered, it is important to take note of the following points in this regard;
The debt review process will afford you the following:
Instant protection from debt collectors and legal action from your creditors
Creditors are not able to repossess assets as long as you keep paying your debt review instalment
Lower monthly payments
A single affordable monthly payment
Lower interest rates in most cases
In some cases, you may be able to settle your debt faster
You will be paying less on debt and therefore have more money available to spend on living expenses and supporting your family
What is debt review
Debt review is a legal option for South African citizens that are over-indebted and find themselves not able to meet their monthly commitments. When you apply for debt review a debt counsellor approaches your creditors and makes payment arrangements on your behalf, with the core goal of their engagement with creditors to lower your monthly payments to a more accessible amount. You then pay one lower monthly payment to a payment distribution agency - which will redistribute your funds to all your creditors. Debt review was developed by the NCR and is part of the National Credit Act 34 of 2005 and the National Credit Amendment Act 19 of 2014. The National Credit Act offers debt relief to over-indebted consumers through the debt review process. The national credit act requires that a creditor perform a full credit assessment before entering into a credit agreement with you, these regulations contain credit assessment criteria that they need to comply with. This is to ensure you have the financial means to pay the proposed credit instalments. However - these regulations are sometimes loosely interpreted by creditors and they put you in a situation where you are over-indebted. Debt review is a solution to this exact situation.
There is no point in losing your assets
When it comes to people who own houses or cars that are financed by the bank, and they are in a situation where they are not able to afford their debt, avoiding debt review is not a good idea. In South Africa’s economic climate, people need help and the debt review process can provide that help. Not only does the process help your financial position, but it also provides you with legal protection against losing your assets.
What to do when you cannot afford your debt review payments
It is important to prioritise your debt review payments every month. The reason for this is that you have a restructured payment plan in place, so skipping payments or paying short is a problem as it does not honour the agreement made, it also gives the creditors the power to terminate the process and enforce the original credit agreement on a consumer. It also allows the creditors the ability by law to take legal action against you for the recovery of the money owed. This is obviously a situation that needs to be avoided whenever and wherever is possible.
With this being said, it is the duty of a debt counsellor to make sure that they understand that life happens to clients, and sometimes there is a need for a review of the process or for the debt counsellor to take action in certain circumstances.
Should you find yourself in a position where you cannot afford your debt review payments, it is important to consider the following:
Is the reason you are not able to pay a valid reason that is not your doing?
Has there been a circumstance change in your life?
Has there been external forces that have caused a change in your financial position?
Have you been reckless and overspent your available money and now can’t afford the debt review?
Has your employment status changed?
Has there been a negative adjustment to your salary or monthly income?
Once you have considered the above, you will quickly come to a realization of the situation and then you will need to consult your debt counsellor. If there has been a valid change in your financial life, debt counsellors can consider the following remedies;
They can issue a 17.3 notice to your creditors asking for a payment break.
The debt counsellor can re-evaluate your debt review proposal.
The debt counsellor can advise how to fix the problem you are having.
At the end of the day, if you have a circumstance change, do not leave the problem unsolved as this will make your financial situation substantially worse. It is important to engage your debt counsellor and play open cards regarding the situation. Thus, working with your debt counsellor to find a viable option or solution to the problem you face.
Your debt counsellor is there to assist, and if they cannot do this effectively, you could consider them as your debt counsellor moving forward into your financial future.
How do I apply for debt review
Applying for debt review is straight forward - reach out to a debt counsellor and start the process today. At Debt Solutions 4 U we believe in making things easier - from our website you have a few options available to you:
Apply for debt review online - we will review your application and let you know if you are eligible
Fill in a contact form and we will phone you soon thereafter
Calculate your savings - you can then send this through to you so we can start the application process
Once you have applied for debt review - you would need to sign the provided Form 16 to become protected under debt review, until then you will not benefit from the protection. If you work closely with your debt counsellor the process should only take a few hours.
