Debt review is a formal debt restructuring process for South Africans struggling to make ends meet at the end of each 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.
This process was built with you, the consumer, in mind, and is highly regulated and can only be conducted by an NCR qualified Debt Counsellor. The process allows a debt counsellor to renegotiate and restructure your debt to an amount that you can afford each month.
Your only requirement during the process is to continue to pay your reduced monthly instalments, and once your plan is complete and your debt is paid off, your credit record is cleared, and you can start living debt-free.
Benefits of Debt Review
The process is simple and is regulated by the National Credit Act that assists thousands of everyday South Africans like yourself every month, by reducing monthly finance instalments to an amount you can afford.
Here are some of the reasons you should consider working with us to help clear your debt through this process:
No more high amounts
We reduce your monthly repayments to an amount you can actually afford, which helps you slowly but surely step out of debt and into financial freedom.
We cover you (and your goods)
You’re provided with immediate protection for yourself and your assets (including your house and car), so there’s no need to worry when you’re under this process.
We’re the ultimate middleman
We negotiate with your credit providers directly, so you don’t receive any more harassing phone calls.
More peace, less stress
We negotiate lower interest rates on your behalf, and we extend your repayment terms. This means you get a bit more breathing room as you begin moving towards more financial stability.
We’re comprehensive from start to finish
Once you’ve cleared your debt, we apply to clear your credit report. So, all you have to do throughout the process is make your payments. We do everything else on your behalf!
The ultimate reason to apply for debt review is simply to get on a better financial wicket overall. To live debt-free is the goal, and with this process it becomes possible.
Who Can Go Under Debt Review?
Anyone can apply, but unfortunately, not everyone qualifies for the process. To be accepted to go under debt review, you need to meet the following criteria:
- You must be a South African citizen between the ages of 18 and 65 with a valid South African ID.
- You must be over-indebted. That means you’re not able to cover your essential living expenses and monthly debt repayments from your income. This is determined by your debt counsellor upon review.
- You must be employed and able to make monthly repayments while under debt review. Unfortunately, if you don’t earn a consistent monthly income, you won’t qualify for the process.
How Long Does the Debt Review Process Last?
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 and 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.
What Are the Costs Involved?
The National Credit Regulator (NCR) issues fee guidelines for Debt Counsellors that include an application and administration fee of R350 plus VAT, a restructuring fee equal to the first month’s instalment up to a maximum of R8,000 plus VAT (maximum of R 9,000 for joint applications married in community of property), and a reckless lending fee of R 1500.00 plus VAT.
There is a monthly maintenance fee of 5% of the instalment up to a maximum of R450 plus VAT. These fees ensure you always receive professional service from your Debt Counsellor and are included in your monthly instalments.
There is also a legal fee payable to the attorneys for obtaining a court order to ensure you are protected from your credit providers for the duration of your debt review. Your Debt Counsellor provides details of this in your application.
Will I Get a Loan After Debt Review?
Once you’ve successfully completed the debt review process and received your clearance certificate, you can apply for a loan. It’s important to remember that debt review isn’t a life sentence.
It’s also important to note, however, that you’ll need to start building up your credit score again before doing so. The reason for this is that debt review gives you a clean credit slate.
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!
