Debt review is a legal process available to South African consumers. The process is created by the National Credit Act 34 of 2005 for those who are struggling to pay off their debts. Counselling provides a debt relief option as part of the process. This aims to help individuals who are over-indebted. It provides consumers with advice and measures to restructure their debt and make repayments that are affordable to them.
The debt review process involves working with a debt counsellor. They are registered with the National Credit Regulator (NCR). They will assess the individual’s financial situation, including their income, expenses, and debts. The debt counsellor will then negotiate with the individual’s creditors to assist them in managing their debt. They act on the consumer’s behalf to restructure their debts into a more manageable repayment plan. This may mean extending the repayment period or reducing the interest rates or fees. Consolidating many debts into one monthly payment is sometimes also suggested.
Reasons to Consider Debt Review
If you suffer from over-indebtedness and are seeking relief, then consider the many advantages of debt review.
- It offers protection. The first piece of relief is protection from harassment. Once the process begins, you are protected from legal action by your creditors. You cannot be blacklisted by credit bureaus and are protected from legal action such as garnishee orders, and repossession of assets or property. You may also not be evicted from your home.
- Manageable monthly payment options. Debt counsellors can negotiate more manageable monthly repayments with credit providers. You can also make a single monthly payment to a Payment Distribution Agency (PDA). The PDA will distribute the funds to creditors on your behalf. This relieves you from a significant administrative burden.
- A realistic payment plan. Debt review allows the debt counsellor to ask for a new payment plan for the consumer who is struggling with debt. They also get a court order to confirm it. To be a Debt Counsellor, a person must register with the National Credit Regulator. They must have an NCRDC number to prove this.
Debt counsellors will explain the benefits and disadvantages of accepting debt counselling. They will also let you know what the costs involved are so that you can make an informed decision.
Why Opt for Registered Debt Counsellors?
Many dishonest debt advisors in South Africa aren’t registered with the National Credit Regulator (NCR). These people claim to be ‘debt specialists’ but are not. They often take the money of vulnerable people who are struggling with debt and promise to get them out of debt fast. They then charge exorbitant fees for poor-quality advice and bad service making the situation worse. Using the services of a registered debt counsellor is best because you can rest assured that you are dealing with a trustworthy professional who is qualified and has the NCR’s approval.
Debt review is a legal process governed by the NCA. Registered debt counsellors must obey the NCA and its regulations. This means that they have a legal and ethical obligation to act in your best interests. They must follow strict processes and procedures that protect consumers. They must be able to protect consumers from dishonest lenders or those who want to take advantage of the situation.
The Road to Freedom from Debt
Becoming debt free can be a complex process. So, it is important to have expert advice and guidance to achieve the best possible outcome. Registered debt counsellors can assist you in making informed decisions about how to manage your debt.
Avoid unregistered or unreliable debt review agents as they may make your situation worse. Instead, speak to a registered debt counsellor to stop struggling with your debt alone.
Are You Financially Distressed? Then, Turn to National Debt Counsellors
National Debt Counsellors assists thousands of South Africans every month with debt relief. Through a comprehensive debt review process, they help you attain financial freedom without debt.
Contact us today for a free, no-obligation assessment of your financial situation.