Debt review, also known as debt counselling, is a debt relief measure in South Africa that helps over-indebted consumers get out of debt. The National Credit Act (NCA) introduced the process in 2007 to prevent consumers from being blacklisted and having to deal with the consequences thereof.
The process is ideal for South Africans with an income who are struggling to make ends meet and are falling further into debt to keep up with monthly debt payments. It is safer and more effective than debt consolidation, payday loans, and other debt solutions, which often end up being short-term solutions or get consumers further into debt.
Do you have too much outstanding debt? Are you struggling to cover basic living expenses? If so, you should apply for debt review.
If you are over-indebted, you can approach a debt counsellor to help you with the legal process. Your debt counsellor must be registered with the National Credit Regulator (NCR), such as Debt Rescue.
Debt counsellors help consumers by means of:
- An affordable monthly budget
- Restructuring of debts so you only pay one monthly debt repayment
- Taking over all communication with Credit Providers
- Negotiating with credit providers for reduced payments
- Legal protection
An affordable monthly budget
While under debt review, your debt counsellor will provide you with a new affordable monthly budget and debt repayment plan tailored to your needs. You will also receive advice and guidance on how to handle your finances to ensure a long-term debt-free future.
Restructuring of debts
Your designated debt counsellor will help restructure your debts so you only have to pay one reduced monthly debt repayment to a payment distribution agency, which will then pay all your creditors. This way, you will be able to afford your monthly debt repayments while still being able to cover all your living expenses.
Communication with Credit Providers
While under debt review, you no longer have to communicate with your credit providers. In fact, you should cut all communication with them. This means you no longer have to receive calls from creditors asking you for money – your debt counsellor will take that stress away from you.
Negotiating with credit providers
Your debt counsellor will negotiate with your credit providers to extend your debt repayment terms. This will reduce the monthly amount you will have to pay towards debt every month and free up some of your income. This will ensure you can afford to pay for living expenses.
Before being placed under debt review, you may be threatened with legal action by your creditors. Under debt review, you are protected by the NCA. This means that creditors are no longer allowed to hassle you – and should not communicate with you at all. Your debt counsellor will handle all legal matters for you going forward.
Do you need debt review?
Debt Rescue urges all consumers to spend, save and pay back your debts wisely. There are various ways to pay off your debt, such as the debt avalanche method. However, you may be past the point of being able to pay back your debts by yourself.
10 signs you may need debt review to help you
- You’ve maxed out your overdraft/credit cards.
- You’ve fallen behind on one or more payments.
- You don’t have enough money to cover living expenses.
- You are failing to save.
- You don’t have an emergency fund.
- You’re selling assets to make ends meet.
- Creditors are calling you to ask about debt payments.
- You’re taking out payday loans.
- You’re borrowing from your retirement savings.
- You’re losing sleep stressing about money.
Don’t let debt define you any longer. If you’re struggling with debt, contact Debt Rescue. We can guide you through the entire debt review process and help you become debt-free for good.