If we told you that more than 10 million South Africans are burdened by unmanageable debt, would you believe us? That is 40% of the current credit-active population. Unfortunately, it’s true. Being in debt is one of the most crippling and stressful experiences a person can go through. The meaning of debt review is the solution.
Fortunately, this process was created for this reason, in the hopes of curtailing the number of people getting into debt. The government introduced debt review to address this issue and help over-indebted South Africans gain financial freedom in their lives. So, what is the meaning of debt review?
What is the Meaning of Debt Review?
Debt review, in short, is a formal debt restructuring process for South Africans who are struggling to make ends meet at the end of every month. It was created under the National Credit Act 34 of 2005 (‘NCA’) and was the government’s answer to the rising problem of consumer debt and the chronic over-indebtedness that plagues many South Africans, as we’ve pointed out above.
The debt review process was created with you, the consumer, in mind, and is highly regulated and can only be conducted by a National Credit Regulator (‘NCR’) qualified Debt Counsellor. The process allows the debt counsellor to renegotiate and restructure your debt to an amount that you can afford each month, with the ultimate goal of helping you pay off your debt in full.
All that’s required of you during the debt review process is to continue paying your reduced monthly instalments, and once your plan is completed and your debt is paid off, your credit record will be cleared, and you can start living debt-free.
What Does it Mean to Be Under Debt Review?
Being under debt review is the first step to your financial freedom, and it means that you have appointed a debt counsellor who has worked through your income and expenses and has determined that you are over-indebted and unable to make your month-end payments.
As mentioned, this entire process is regulated by the NCR under the National Credit Act.
How the Debt Review Process Works with National Debt Counsellors
The process is much simpler (and less daunting) than you might expect. It can be summarised in a few easy steps:
Step 1: Request a Free Consultation from National Debt Counsellors
One of our professional consultants at National Debt Counsellors contacts you and takes you through a free no-obligation financial assessment to determine whether you qualify to go under debt review. Don’t worry, this process is completely confidential!
Step 2: Complete Your Application Form
If you qualify for the debt review process, we send you an application form (Form 16) to complete and sign.
Step 3: We Notify Your Creditors
We then notify your creditors that you’ve applied to go under debt review. From here, you and your assets are immediately protected under the National Credit Act.
Step 4: We Negotiate a New Payment Plan for You
This is where the magic happens! We negotiate your loan agreements with your credit providers and restructure your repayments to an amount that’s affordable for you. This means you’ll no longer struggle to make payments each month!
Step 5: Pay a Single, Affordable Monthly Instalment
Once we’ve handled the above steps for you, you’ll begin paying one easy monthly instalment via an accredited PDA (Payment Distribution Authority), which distributes the funds to your credit providers.
Step 6: We Make the Approved Plan an Order of the Court
Our panel of Attorneys apply to the Magistrates Court on your behalf to make your restructured repayment plan an official order of the court and ensure you remain protected during the process.
Step 7: Your Debt is Paid Off and Your Credit Record is Clear!
Slowly but surely, you’ll pay off your debt. Hooray! Once it’s repaid, we issue a clearance certificate and notify the credit bureaus to clear your credit record. You are now able to live in financial freedom! Cue the budget-friendly celebration.
Are There Any Disadvantages of Being Under Debt Review?
While the debt review process is an obvious necessity if you’re in serious financial trouble, it’s important to be aware of the following:
- You are not allowed to apply for additional credit or loans while under debt review.
- Your debt review status reflects on your credit record until the completion of the process, or when all your debts are paid in full.
- The payment period of your debt is extended to lower your monthly instalments.
Why You Should Work with Us
We’re a team of leading debt review consultants who believe that debt doesn’t mean disaster. We assist everyday South Africans who find themselves struggling to meet their monthly financial obligations. Our team of Debt Counsellors are registered with the National Credit Regulator and offers you a no-obligation, free assessment of your financial situation.
Our reputation for providing exceptional service is only enhanced by the great relationships we’ve cultivated with all the major credit providers in South Africa. This gives us confidence to negotiate the best payment plan to suit your financial needs and ensures that we protect you and your assets.
We’re available from Monday to Saturday to assist you with any queries or questions you may have.
If you commit to the debt review process properly, your life can change. If you’re struggling to manage your debt, take that first step towards financial freedom and contact us today. Don’t put it off, because your financial freedom is waiting!
