What is debt review
Debt review is a process that when carried out correctly, can significantly improve a person’s financial life, reduce their stress levels and allow them to live a meaningful and happy life once again. With this being said, not everyone can qualify for debt review and there are instances where it can be declined. Below is a list of those scenarios:- Your current budget allows you to comfortably pay your debts at the current interest rates.
- You do not have enough debt to qualify
- Your current monthly instalments are below the legal minimum required to qualify for debt review.
- You cannot afford the debt counselling or legal fees
- Your debt counsellor could not find an instalment that fitted within your budget.
- There are judgments on all of your accounts or there is pending legal action on all of your accounts
- You are under administration or sequestration.
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
- Your credit profile will be marked as under debt review while you are under debt review so that you cannot borrow money during the process
- 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.