Debt Counselling / Debt Review - What You Need to Know
If you are struggling to breathe under all the debt, you're looking for debt reduction or to eventually become debt free in South Africa, you're in the right place.
Debt counselling, also known as debt review, is a regulated debt relief measure (process) that can help South Africans who are over-indebted and struggling to make ends meet.
The Truth About Debt Review (also known as Debt Counselling)
The truth about going through the debt review process is that it is not always easy, but in the end, it's very much worthwhile.
Debt review was introduced in South Africa in 2007 through the National Credit Act. This process, including the fees for the process, The National Credit Act's main objective is to assist people battling with their debt - whether it is repayments on their houses, cars, credit cards, and accounts or are facing possible repossession.
How does the debt review process work?
When you are placed under debt review, you have appointed a debt counsellor who has worked through your income and expenses and has determined that you are over-indebted and debt stressed.
This debt counsellor will then inform your creditors and the credit bureaus and draw up an interim repayment plan.
- This plan often reduces your monthly debt repayments by up to 50% and reduces the interest rates on unsecured lending.
- Your debt repayment plan, created by the debt counsellor, will then be submitted to a registered payment distribution agency (PDA) that makes all the payments to your creditors on behalf of the debt counselling company
- Once your creditors accept the revised repayment plan, legal action cannot be taken against you with regard to your debts under review.
- Once all your debts have been repaid, you will be issued with a clearance certificate by your debt counsellor and they will notify the credit bureaus that you are no longer under debt review/debt counselling.
It’s important to note that debt counselling is not like blacklisting and any record of being under review will be removed from your credit record once the process has concluded successfully.
Why debt review?
You’ve seen the advantages of debt review and hopefully have a better understanding of the whole process, now we will touch on when and why you should consider debt review.
- Firstly, while under debt review, you’ll only pay one fixed monthly payment instead of multiple payments to different vendors. Making your life much simpler! Less admin!
- Secondly, your debt counsellor will negotiate reduced monthly payments towards debt repayment, which can help you create room to afford your expenses.
- Third, the NCA will legally protect you from creditors repossessing your assets.
- Lastly, credit bureaus no longer have the power to blacklist you when you are under debt review. These are, but a few reasons why going under debt review will make your life easier and lead you towards financial freedom!
Want to know more about the debt review process? Read this blog post.
Who is Meerkat?
Meerkat is a registered financial services provider. We've been voted as one of the Top 5 national debt counsellors in the country. We also have a 4.5/5 rating on Hellopeter. Let us contact you about our debt management solution, debt review today!