Being over-indebted is an uphill battle that never seems to cease. Unfortunately, it’s made worse by companies that claim that free debt review removal is possible, using illegal means and false information.
We’re here to settle the debate once and for all, and hopefully give you peace of mind when it comes to debt review and debt in general. As if you needed more stress in your life!
What is Debt Review
First, let’s clarify what debt review is exactly.
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.
Debt review 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 debt review 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.
Is Free Debt Review Removal Possible?
We’re going to answer this right up front; No, free debt review removal is not possible. Any company or debt counsellor that tells you any different is most probably not registered with the National Credit Regulator and is only looking to make a quick buck off your desperation.
Debt review can only be completed in one of these two ways:
Pay Your Debts
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 in Circumstance
The second way to complete the debt review process is if you have a substantial change in circumstance and 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.
If you’re under debt review and you believe that you qualify for a clearance, you can contact the National Debt Counsellors for a free financial assessment. If you do qualify and you’re no longer deemed overindebted, we will apply for an order rescinding your debt review on your behalf.
As a rule, we suggest that you rather follow the first option, you can always pay more towards your debt at any stage of the process and thus reduce the time you will remain under debt review. You’ll also continue to benefit from the improved terms negotiated for you by your debt counsellor on the first option. Overall, settling your debt in full is always the best option.
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. This is not legal practice and is often a scam to defraud you out of money. The debt review process can only be conducted by a reputable NCR-registered debt counsellor.
You can find the list of registered debt counsellors here.
The Case for Debt Review
As NCR-registered debt counsellors, we at NDC believe that a debt-free life is possible. You don’t need quick schemes or fancy techniques to get there, you just need commitment to the goal. Debt review is not a life sentence, it’s the first step towards financial freedom!
Don’t let anyone tell you that being in debt will somehow free you—it won’t. Stay focused and remember that true freedom comes from being in control of your money. Keep going, and you’ll soon enjoy a life without the weight of debt dragging you down, where peace of mind and financial stability are the norm.
Doesn’t that sound like the life you want? Well, it’s waiting for you. Get in touch with us today to begin the most worthwhile journey of your life.
