Debt Review (or Debt Counselling as it is sometimes referred to) is a legal process every South African can make use of if they are over-indebted. In short, a person is over-indebted if he / she does not have the ability to meet all their financial commitments at the end of the month.
Let’s put it this way – If you consistently have more month left over than money in your bank account, and your phone is ringing off the hook with creditors, threatening to take legal action, you might well be over-indebted.
It’s estimated that 25 million South Africans are in debt and 40% of them are behind with their repayments. The irony is that very few over-indebted South Africans realise that a parachute cord, they can pull, is provided to them in a piece of legislation called the National Credit Act.
The first step is getting in contact with a registered Debt Counsellor like us. A Debt Counsellor is required by law to conduct an assessment concerning the over-indebtedness of a consumer and to attempt to create a restructuring proposal acceptable to all credit providers.
In a nutshell, a Debt Counsellor is going to look at your personal financial situation and make a recommendation to the credit providers, you owe money to, about reducing your monthly debt repayments.
It just means that you can breathe because once you are under Debt Review the people you owe money to (credit providers) can’t harass you anymore. You also have a longer period to repay your debt which will create a positive cashflow.
Once your credit providers agree to the new terms, your application finds its way to a South African Magistrate’s Court and you will be legally classified as being under Debt Review.
While under the Debt Review process you can’t apply for any additional credit. This is an important bit of information to consider.
It could take a few years to repay all your debt and work your way back to a healthy financial situation, and in that time, you will not be able to get a loan of any sorts.
Only once your debt is fully repaid will the status of Debt Review be lifted, and you will be eligible to apply for credit again.
Most people who are a behind with a debt repayment or two can probably tighten up their budget and work themselves back into a positive cashflow position.
Debt Review is for the person who can’t get any sleep at night because there doesn’t seem to be any light at the end of the tunnel and the walls feel like they are closing in on them.
South African Debt Advisors (Pty) Ltd
Registration number: 2019 / 351876 / 07
National Credit Regulator Registration: NCRDC3580
Info@sadebtadvisors.co.za
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