Being overindebted can cause times of stress and anxiety, so it makes sense that one would seek to get rid of their debt by means of debt review. But how long is the debt review process? And how do you complete it? Let’s take a closer look at this process.
How Debt Review Works
The process can be summarised in a few steps:
Step 1: Request a Free Consultation from National Debt Counsellors
One of our professional consultants contacts you and takes you through a free, no-obligation financial assessment to determine whether you qualify to go under debt review.
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
We negotiate your loan agreements with your credit providers and restructure your repayments to an amount that’s affordable for you.
Step 5: Pay an Affordable Monthly Instalment
Once we’ve handled the above steps for you, you’ll begin paying one easy monthly instalment via an accredited 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. Once it’s repaid, we issue a clearance certificate and notify the credit bureaus to clear your credit record.
Now that we’ve gone over the process of debt review, let’s look at how long it is.
How Long is the Debt Review Process?
The debt review period varies according to how quickly you can pay off all your debts. The process can last for just a few months, or up to 60 months. Alternatively, if you’re no longer over-indebted, there is no court order in place and you can resume normal repayments, we can begin the debt review removal process for you by applying for an order to rescind your debt review status.
It’s important to note that debt counselling is not the same as blacklisting. Any record of you being under debt review is removed from your credit record once you’ve completed the process successfully.
How to Complete Debt Review
Debt review is completed in one of two ways:
Pay Off Your Debt
Firstly, and most obviously, you can complete the debt review process by paying off all your debt in full. It’s important to note that this only applies to unsecured credit and vehicle finance. You’re not required to pay off your home loan to complete the debt review process. As long as repayments on the home loan are up to date.
As your debts are repaid one by one, your debt counsellor collects paid-up letters from your creditors and shares them with you. Once all your debts are completely paid off, your debt counsellor issues you with a clearance certificate and notifies the credit bureaus.
You’re now debt-free, and your credit record is clear!
Change of Circumstance
The second way to complete the debt review process is if you have a substantial change in circumstance. This means you can now afford to start paying your debt again at the original contract terms. This means you can be declared no longer over-indebted by the courts. This only applies if there is no court order in place already declaring you overindebted.
It’s important to note that if you request this, you’ll no longer pay your reduced monthly instalment amount, but rather, you’ll need to pay the amounts originally agreed with your creditors when you took out the loans.
You’ll also no longer benefit from the reduced interest rates negotiated by your debt counsellor. In addition, you’ll need to prove to the court that you have had a significant change in circumstance like a major promotion or that your partner has returned to work.
A Brief Warning
It’s important to be careful and practice healthy scepticism towards anyone who tells you that they can get you out of the debt review process for a fee by transferring to a new debt counsellor. This is not legal practice, and more often than not, these debt counsellors are not properly registered with the NCR and their actions are not in your best interest at all. Staying aware of these kinds of scams will save you a lot of time and a lot of money.
Why Choose the National Debt Counsellors?
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.
