Many South Africans who are overwhelmed by debt, turn to debt review as a practical and legal solution. Debt Review is formulated to create stability, to protect your assets like your home or vehicle, and to restore your financial dignity.
With the assistance of a registered debt counsellor, consumers can expect affordable restructured debt repayments, as well as legal protection from creditors.
But many ask the question, how long will you stay under debt review? This depends on a few important factors, which we are going to discuss in this blog.
What is Debt Review?
Introduced by the National Credit Act in 2007, Debt review is a regulated process designed to assist South Africans who can no longer afford to pay their monthly debt commitments. A qualified and NCR registered debt counsellor will assess your financial situation, and once it is determined that you are over-indebted, will then negotiate with your creditors and create a new repayment plan.
This Repayment plan offers:
- A single reduced monthly debt repayment.
- You are protected from any further legal actions.
- Your assets are protected from repossession.
- Your essential living expenses are factored in.
What are the Factors that Influence the Duration of Debt Review?
No two debt review timelines are the same. Each individual’s financial situation varies and while this process typically takes between 3 to 5 years there are factors which determine the duration.
1. Your Total Amount of Debt
The bigger the amount of debt you have, the longer it will take to pay it off. Your debt counsellor will calculate the total outstanding balances and by using this information design a new repayment plan based on what you can afford.
2. How much can you Afford per Month?
A major factor in the duration of debt review is your new monthly debt repayment amount. Lower installments means a longer time period, while higher payments can help you exit the debt review process faster. The debt review process is designed to ensure that you can afford your essential expenses, while paying off your debt.
3. Interest Rates
Your debt counsellor will negotiate with your creditors for lower interest rates, but these reductions are not guaranteed. It is important to note that credit providers are not obligated to lower their interest rates, although many do.
Interest on your debts, especially ones with high rates, can influence how long you will remain under debt review.
4. Changes in your Financial Situation
If your income increases while you are under debt review, you will be able to pay more towards your debt repayments. This will reduce the overall duration. Many clients exit debt review sooner simply by choosing to pay more than the agreed amount, when they are financially able to do so.
If your financial situation worsens, immediately contact your debt counsellor so that can review and adjust your repayment plan.
5. Your Commitment
It is important to stay committed and consistent with your payments. Missing a payment can result in the termination of your debt review. Creditors will then also be able to take legal action against you.
By sticking to your court ordered repayment plan every month, will ensure you stay on track and reach your goal faster.
Debt Review is a Structured Legal Solution Designed to Help You!
Debt Review should not be seen as something that will last forever. It is a structured legal solution to give you the space and breathing room to rebuild your financial future.
Once all your debts included in the debt review process are settled, you are no longer over-indebted. The credit bureaus will be notified of your new status and you will receive a clearance certificate. You will then be able to re-enter into the credit market, debt free.
With the help of one of most established debt review companies like Debt Rescue, thousands of South Africans have successfully exited the debt review process.
You deserve a second chance, let us help you today.
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