There are many questions that you may ask yourself before deciding to go under debt review. One of the most prevalent questions is, “will I lose my financed vehicle if I go under debt review?”.
The short answer is, no. Under debt review your assets will be protected from legal action.
What is Debt Review?
Debt review, also known as debt counselling, is a debt relief measure in South Africa that helps over-indebted consumers get out of debt. Debt review protects the consumer and their assets from legal action. The National Credit Act (NCA) introduced the process in 2007 to prevent over-indebted consumers from being blacklisted and having to deal with the consequences thereof. Read more here.
What if You Have a Balloon Payment on Your Vehicle Finance?
If you have a balloon payment linked to your vehicle finance when applying for debt review, the balloon payment will be included under the process in your new monthly instalment. You will no longer be liable to pay the balloon payment in full at the end of the repayment term.
What Will Happen to Your Vehicle Insurance?
If your car is still financed, it is mandatory that you have comprehensive active vehicle insurance for the vehicle. This rule remains in place should you apply for Debt Review. Once the Debt Counsellor starts contacting the credit provider that your vehicle is financed, the credit provider will most likely request proof of vehicle insurance from the debt counsellor, which the client will need to provide.
When Will Your Vehicle Not Be Protected?
Debt review can protect your vehicle from car repossession in most situations. However, if the following has occurred, there may be little that debt review can do to save your asset. These situations are:
· If you have received a Section 129 Letter of Demand
· You have missed payments on your debt review
· You have terminated your debt review
Because debt review acts as a legal protective measure against creditors and shields you from repossession of assets, it is necessary to start the process as soon as possible. When you realise that you are no longer able to afford your monthly debt repayments, make sure to contact Debt Rescue to ensure everything you have worked for is not out of your hands.
Ready to Protect Your Assets?
If you have looked at your budget and realise that you need immediate financial relief. Choose to protect your assets by only paying one affordable debt repayment per month. You are welcome to request a no-obligation free quote here. Or get us to contact you back, free of charge. Whichever method you choose, make sure that you protect your finances and the assets that you have worked so hard to acquire.