Debt Counselling is specifically for people who cannot keep to the monthly debt instalments. This pertains to debt itself, a credit agreement. Arrears on service related accounts is classified as accidental debt. Any accounts or month to month contracts which is not classified as a credit account, for example school fees, cell phone contracts, municipal fees, insurances, etc. will not be able to form part of the debt counselling process and direct payment arrangements will have to be made with them. There have been some instances where we were able to include the arrears which have accumulated, but it is at the service provider’s discretion whether or not they are willing to accept the reduced payments through the debt review process. It is important to note that the month to month payments must still be paid.
At Debt Solutions 4 U, we complete a free, non-obligatory financial assessment to show how we can help and advise on the best way forward. It will be best to complete an assessment to see if possible to include such accounts in the process.
What is debt review in South Africa?
Debt review is a legal option for South African citizens that are over-indebted and find themselves not able to meet their monthly commitments. This process has been uniquely tailored to assist people in our unique country. 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.
How can the Debt review listing be removed?
There are two ways to get the debt review flag removed from your name:
Settle all of the debt which has been listed under debt counselling. The debt counsellor can then issue a clearance certificate and remove the debt review flag from your name.
A firm can apply through the courts to reject the debt counselling. This means that you will need to prove that you can afford the original contractual instalments prior to the debt review. There are also costs involved and will be discussed with the firm directly.
Advantages of debt review
Debt review is a handy financial tool, while you are under debt review the following benefits are clear:
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 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
Disadvantages of debt review
While under debt review - the following effects are to your detriment:
You are not able to apply for more debt while under debt review
In some cases, it can take longer to settle your debt
You are bound to your debt review agreement and it can't be cancelled until you complete your entire debt review plan and settle all your debts
You still need to settle the agreed payment per month so that the national distribution agency can pay your creditors.
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.
