If you’re struggling with the cost of living, you’re certainly not alone. Around 10-million South Africans are over-indebted, meaning that they cannot repay their debt on their current income, according to the FinMark Trust. This is hugely stressful for households who must field calls from creditors and debt collectors while trying to meet their obligations.
That’s why debt review can offer a way out. This is a regulated process under the National Credit Act, which involves working with a debt counsellor to restructure your debt to reduce monthly payments while paying back the money you owe. You get immediate relief in your monthly budget so that you can cover essentials. Once you’re under debt review, you also get legal protection from having your assets seized while you repay the money.
Is debt review a good idea?
Debt review may be a good idea if you are struggling to repay your loans and need help to restructure your monthly payments. You will need to be in full-time employment and a South African citizen.
Remember that while you’re under debt review, you cannot take on any new debt, for instance, buying a house or car, and you will not have a credit card. The debt review process will be recorded on your credit bureau profile. It also extends your total repayment time as your monthly repayments will be reduced.
When should you go under debt review?
You should apply for debt review if you can’t meet your monthly instalments on your current income. If you’re feeling overwhelmed by your current debt load and struggling to keep up with repayments, debt review may be an option for you. You must be able to commit to a new payment plan and rein in your spending until your debt is paid off in full. This often takes between 36 months and 60 months, depending on how much you owe.
You should not go under debt review if you are planning to take on more debt. The aim is to get out of your situation, not to make your situation even worse.
Who qualifies for debt review?
You must be a South African citizen, permanently employed, and aged between 18 and 65. You must have a South African ID and be able to show proof of income and expenses.
Unfortunately, debt review is not available to self-employed individuals, retired individuals, or foreign nationals.
What are the benefits of debt review?
While you’re under debt review, you receive legal protection from your creditors. For many people, the biggest benefit is relieving the anxiety and stress they feel about their finances. Instead of dodging creditor calls, you are able to focus on doing your job and providing for your family.
Another benefit is that there’s someone on your side throughout the process, and you don’t have to feel alone. You will work with a counsellor to get guidance and support in paying off your debt. Debt Rescue’s counsellors are registered with the National Credit Regulator (NCR), so you know that you are getting expert advice for your situation.
What is the debt review process?
Debt review is a step-by-step process.
- We start with a free debt assessment to see whether debt review is the right solution for you.
- We then create a customised debt review plan so that your payments are affordable and sustainable. We also notify credit providers and credit bureaus that you are under debt review. This protects you from harassment and legal action during the process. We negotiate lower interest rates and extended repayment.
- The plan is submitted to the Magistrate’s Court for approval, which then makes it legally binding, giving you full legal protection.
- You make a single monthly payment for the duration of the process.
- Once you’ve repaid all your debts, you get a clearance certificate allowing you to take on new debt. You can then exit debt review.
Are you hoping debt review can help you? Apply here for an obligation-free quote from Debt Rescue.