Overwhelmed by Debt? Find Out If Debt Review Can Help
Debt review meaning: Debt review is a legal solution that protects you from creditors and helps you manage your debt affordably. Take the first step toward financial freedom today.
When you are in debt review:
- A debt counsellor assesses your financial situation.
- An affordable repayment plan is negotiated with your creditors. You can save up to 50% on your monthly debt repayment.
- You gain protection from legal action by creditors as long as you adhere to the new repayment terms.
- Did you know: Meerkat has been voted as one of the Top 5 National Debt Counselling companies in South Africa.
In this blog post we'll unpack the truth about debt review, debt review pros and cons, what it means to be under debt review any consequences of the debt counselling process.
Is debt review a good idea in South Africa?
When you cannot cope with your monthly debt repayments, not only is it a good idea to go under debt review in South Africa, it's actually the best idea for you. Debt review, when done with a registered NCR debt review company, is a legal, proven way to get out of debt and get back on track with your finances!
Read this blog post about how The Dlomo family saved R23 000 on their monthly debt repayment thanks to Meerkat!
What happens during debt review?
When you go into debt review, it means you've applied for debt review and a registered Debt Counsellor has worked through your income and expenses and has determined that you are over-indebted. In short, when you are in debt review it means a Debt Counsellor has worked out a repayment plan for you to help you manage repaying your debts.
How does debt review work?
Below is a step-by-step outline of how the debt review process works:
- Assessment: A debt counsellor evaluates your income, expenses, and debts to determine if you qualify for debt review.
- Proposal: The counsellor drafts a repayment plan based on your affordability.
- Negotiation: The repayment plan is shared with your creditors for approval.
- Court Approval: Once creditors agree, the plan is formalised through a court order. At this point your assets like your home and your car are legally protected from being repossessed.
- Repayment: You make a single monthly payment to a Payment Distribution Agency (PDA), which distributes funds to creditors.
- Clearance: Upon settling all debts, you receive a debt review clearance certificate and are no longer under debt review.
Watch this video with Founder & CEO of Meerkat, David O'Brien as he discusses the process
Benefits of debt review
- Protection from Creditors: Creditors cannot seize your assets or initiate legal proceedings if you are under debt review.
- Lower Repayments: Monthly payments are reduced to align with your affordability. Did you know: you can save up to 50% on your monthly debt repayments?
- Asset Protection: Your home and car are safeguarded, provided you stick to the payment plan.
- Stress Reduction: Simplifies debt management by consolidating payments. You only make one payment for all of your debt each month.
- Clearance: You get a clearance certificate and a clean credit slate, putting you in a stronger position to apply for credit at the end of it.
Common Myths About Debt Review
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Myth: Debt review means you are blacklisted.
Truth: Debt review does NOT mean you are blacklisted. There is no such thing as being blacklisted. This can just refer to any negative information on your credit report. While there is a warning that is placed on your credit report when you are under debt review, this is temporary and does not mean you are blacklisted. It just means that you temporarily won't have access to credit.
Read this blog post about being blacklisted. -
Myth: You’ll lose your assets under debt review.
Truth: The process is designed to protect your assets as long as you comply with the repayment plan.
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Myth: Debt review is the same as bankruptcy.
Truth: Unlike bankruptcy, debt review allows you to settle your debts in full over time, avoiding the severe consequences of insolvency.
Frequently Asked Questions (FAQs)
1. How long do you stay under debt review?
The time you stay under debt review is dependent on your debt amount and affordability. Typically, it ranges from 36 to 60 months.
2. Can I exit debt review before completing it?
Yes, but only under specific conditions, such as fully settling your debts or upon a court ruling.
3. What happens when you are done with debt review?
When you are done with debt review, your debt counsellor will issue you with a clearance certificate and credit bureaus will remove the debt review flag from your credit report. You are now free to start applying for credit again!
A common disadvantage of the debt review process is that when you are in the debt review process, you will not be able to borrow money (take out loans or use credit).
What's important to note about this is that it is only temporary. Once you've successfully completed the process, you will be able to apply for credit again. And, if you are already struggling to pay your debt and you've missed some of your debt repayments, you may not be approved for further credit.
Your best chance at improving your chances of securing credit in the future is to go under debt review.
Find out more about the advantages and disadvantages of the debt review process here.
5. How do I qualify for debt review?
To qualify for debt review, you must be earning an income and be considered to be over-indebted (struggling to pay your monthly debt repayments).
6. What is the red flag on debt review?
The red flag for debt review refers to the warning that is placed on your credit report when you are in the debt review process. This flag is removed when you have successfully completed the process. The only reason it is temporarily in place is to let creditors know that you cannot access any further credit for the time being. This is in fact for your protection. You can't get rid of debt by creating more debt.
7. How can I remove myself from debt review?
If you have paid up all you debt but still have the debt review flag on your credit report, you can't remove yourself from debt review, but you can get Meerkat to remove you.
Read this blog post to find out how.
8. How much does it cost to remove debt review?
The cost to remove debt review at Meerkat is R1150 if you have your paid up letters.
How Meerkat Can Help
At Meerkat, we’re dedicated to helping you take charge of your financial future. Our expert debt counsellors work with you to create a manageable repayment plan, ensuring you can meet your obligations without sacrificing your well-being. Contact us today to start your journey to financial freedom.
We've also been voted as one of the Top 5 Debt Counselling Practices in South Africa!
Your journey to financial freedom starts here.
Leave your details and we’ll give you a call back to discuss how we can help.