We are often asked – what is debt review? Here we hope to answer this question effectively. Debt review, also known as debt counselling, is a South African debt management process regulated by the National Credit Act (NCA). It is specifically designed to help individuals who are over-indebted and struggling to manage their debt repayments. Debt review provides an opportunity for these individuals to restructure their debt and work with a debt counsellor to create a personalized repayment plan.
Becoming Debt-Free Through Debt Review
In today’s fast-paced world, it is not uncommon for individuals to find themselves struggling with debt. South Africans, in particular, are no exception to this global issue. If you’re one of the many people searching for an effective solution to become debt-free, look no further than debt review. As a well-established and legally recognized process, debt review can help you regain control of your finances and lead a more financially stable life. In this article, we will explore the benefits of debt review and how National Debt Counsellors can assist you in your journey to financial freedom.
How Debt Review Works
- Assessment: The first step in the debt review process is an assessment of your financial situation. A debt counsellor will evaluate your income, expenses, and debt obligations to determine if you qualify for debt review.
- Application: If you qualify, the debt counsellor will submit your application for debt review to the National Credit Regulator (NCR). Once your application has been accepted, you’ll be protected from legal action by your creditors.
- Negotiation: Your debt counsellor will negotiate with your creditors to restructure your debt repayments. This may involve extending the repayment period, reducing interest rates, and/or lowering monthly instalments.
- Repayment Plan: Once an agreement has been reached with your creditors, your debt counsellor will develop a new repayment plan tailored to your specific financial situation. This will ensure that you can manage your monthly obligations without sacrificing essential living expenses.
- Payment Distribution: A Payment Distribution Agency (PDA) will be responsible for distributing your monthly payments to your creditors according to the new repayment plan.
- Clearance Certificate: After successfully completing your debt review and repaying all your debts, your debt counsellor will issue a clearance certificate. This will remove the debt review status from your credit record and allow you to regain access to credit facilities.
Benefits of Debt Review
- Protection from Legal Action: As mentioned earlier, once you’ve entered into debt review, you’ll be protected from legal action by your creditors. This means that they cannot take further steps to recover outstanding debts, such as repossessing your assets or garnishing your wages.
- One Affordable Monthly Payment: Debt review consolidates all your debt repayments into one affordable monthly payment. This simplifies your financial commitments and makes it easier for you to manage your finances.
- Reduced Interest Rates: In many cases, debt counsellors can negotiate lower interest rates on your behalf. This can significantly reduce the overall cost of your debt and speed up the repayment process.
- Financial Guidance: Debt review provides you with the guidance and support of a professional debt counsellor. They will help you navigate your financial situation and develop the skills necessary to maintain a healthy financial future.
National Debt Counsellors: Your Partner in Becoming Debt-Free
At National Debt Counsellors, we understand the challenges and stress associated with mounting debt. Our team of experienced and compassionate debt counsellors is committed to helping South Africans achieve financial freedom through debt review. We work closely with you to develop a customized repayment plan that fits your unique circumstances, ensuring a path to a debt-free future.
In conclusion, debt review is an effective solution for South Africans struggling with debt. It provides protection and a structured repayment plan.