Debt review helps people take control of their finances and work towards being debt-free in the future. However, many misconceptions surround debt review that can prevent people from taking advantage of this beneficial process. Let’s debunk some of the most common debt review myths and clarify what the facts are.
Myth 1: Debt Review Is the Same as Debt Consolidation
Many people confuse these two terms, but they are different. Debt consolidation involves taking out a new loan to pay off existing debts, which can sometimes lead to more debt if not managed properly.
In contrast, the debt review process restructures your existing debts into a manageable repayment plan without the need for additional loans:
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.
Fact: Debt Review Provides Legal Protection
Under the debt review process, your assets are protected from repossession, and creditors cannot take legal action against you as long as you adhere to the repayment plan. This legal protection offers peace of mind and security during the repayment process.
Myth 2: Debt Review Is Only for the Financially Irresponsible
This process is not a reflection of financial irresponsibility but rather a proactive step toward financial recovery. Many individuals face unforeseen circumstances, such as job loss or medical emergencies, that can lead to too much debt. It provides a structured path to regain control and work towards financial stability.
Fact: Debt Review Can Improve Your Credit Score Over Time
While entering it may initially impact your credit score, successfully completing the process can lead to an improved credit rating. As you make consistent payments and reduce your overall debt, your credit profile will reflect your commitment to financial responsibility.
Myth 3: You Lose Control of Your Finances Under Debt Review
Some believe that entering this process means losing control over their finances. However, debt review actually empowers you to take control by creating a realistic and sustainable repayment plan. You work closely with a debt counsellor to tailor the plan to your specific financial situation.
Fact: Debt Review is a Confidential Process
The debt review process is confidential and conducted between you, your debt counsellor, and your creditors. Your financial struggles are handled discreetly, and you can seek support without fear of judgment.
Working with National Debt Counsellors
At National Debt Counsellors, we are committed to helping you navigate this journey with confidence and clarity.
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 free, no-obligation assessment of your financial situation.
So, if you’ve been looking for a way to become debt free, you’ve come to the right place. Apply for debt review today to start making smart choices about handling your debt and moving towards financial freedom.
