What Is Debt Review / Debt Counselling: Guide [2019 Update] 🤗🤩🤑

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WHAT IS DEBT REVIEW / DEBT COUNSELLING: THE DEFINITIVE GUIDE [2019 UPDATE]

Debt Review or Debt Counselling is a formal legal process introduced by the The National Credit Act (NCA) that allows a consumer to be declared over indebted by a NCR Registered Debt Counsellor which allows their monthly debt repayments to be reduced via a court order.

HOW DOES DEBT REVIEW / DEBT COUNSELLING WORK AND WHAT IS THE PROCESS?

THE DEBT COUNSELLING / DEBT REVIEW PROCESS WORKS AS FOLLOWS

  1. Send your info to see if you qualify to apply
  2. Applying for debt review
  3. Accept the reduced repayment plan
  4. Paying of your debt according to the repayment plan

SEND US YOUR INFO

  1. Complete the free callback form on our website
  2. One of our expert consultants will call you to answer any questions you may have.
  3. If you choose to continue with the debt review process, we will email you an information form that you can complete online.
  4. You will also need to email us a copy of your ID, 3 month's payslips and 3 month's bank statements.
  5. We will then perform a free no obligation assessment to establish if you qualify to apply for debt review.

APPLY FOR DEBT REVIEW

  1. If you do qualify, we will send you a debt review application form which you can complete online.
  2. You should open a new bank account immediately and ask your employer to deposit your salary into your new account, to avoid money grabbing by your existing creditors.
  3. Once we accept your debt review application form, we will inform your creditors and the credit bureaus within 5 business days that you have applied for debt review which means you are now protected against legal action, blacklisting and your creditors may no longer harass you.
  4. Your creditors then need to send us your detailed account information within 5 business days so we can accurately assess if you are over indebted according to NCR regulations.
  5. If you are found to be over indebted, we will notify your creditors and the creditor bureaus that you are now officially under debt review.

REDUCED REPAYMENT PLAN

  1. We now start negotiating with your credit providers and come up with a reduced repayment plan that you can afford.
  2. Once your creditors accept the repayment plan, our attorneys will obtain a court order to legally enforce the reduced repayment plan.
  3. The payment will consist of a single monthly instalment made to NCR Registered Payment Distribution Agency (PDA) to ensure there is no irregularities.
  4. The PDA in turn then pays all your credit providers on a monthly basis.
  5. Once your debt has been paid in full, we will issue you with a debt clearance certificate. Your creditors then have to inform all the credit bureaus that you are now debt free.

HOW LONG DOES IT TAKE FOR A DEBT CLEARANCE CERTIFICATE?

You will be issued with a debt clearance certificate within 7 days if you can demonstrate that you have fulfilled all of the obligations of your reduced repayment plan and that you have no arrears.

WHAT IS THE ROLE OF A DEBT COUNSELLOR AND WHAT DO THEY DO?

  • Consulting with consumers regarding the process and fees
  • Debt review proposal preparation
  • Negotiating with credit providers
  • Submitting proposals
  • Instructing attorneys to draft court applications
  • Filing national consumer tribunal applications
  • Administering withdrawals by consumers
  • Updating the debt help system
  • Reckless lending assessments
  • Ongoing review of consumer's financial situation
  • Attending to payment queries
  • Administering the clearance process and securing paid-up letters
     

HOW MUCH DOES DEBT COUNSELLING / DEBT REVIEW COST?

THE COST OF DEBT COUNSELLING OR DEBT REVIEW
 
FIRST MONTH
Restructure Fee Equal to your repayment plan instalment (Between R2,000 and R9,000)
Application Fee Free
Administration Fee Free
Determination Fee Free
 
SECOND MONTH
Attorney Fee Equal to your repayment plan instalment (Between R2,000 and R9,000)
Aftercare Fee 5% of your repayment plan instalment (Between R200 and R500)
Reckless Lending Fee R1,500
PDA Fee Maximum of R15 per creditor account
 
THIRD MONTH AND ONWARD
Creditors Equal to your repayment plan instalment (Between R2,000 and R9,000)
Aftercare Fee 5% of your repayment plan instalment (Between R200 and R500)
PDA Fee Maximum of R15 per creditor account

WHAT ARE THE DISADVANTAGES OF DEBT REVIEW?

  • You will not qualify for new credit while under debt review
  • You will have to pay fees for debt counselling
  • Debt review may not cover all of your debt
  • Your debt review status will be listed on your credit record, until the completion of the debt review process

WHAT DOES IT MEAN TO BE UNDER DEBT REVIEW / DEBT COUNSELLING?

In short it means that you have applied for debt review or debt counselling and a qualified, registered debt counsellor has assessed you to be over indebted. You now have protection against legal action, blacklisting, your creditors may no longer harass you and your debt repayments have been reduced. For a detailed explanation, please see how does debt review or debt counselling work and what is the process

WILL DEBT COUNSELLING / DEBT REVIEW HURT OR AFFECT MY CREDIT?

Debt counselling or debt review will not hurt or affect your credit score negatively. It actually has the opposite effect since the credit bureaus will be informed that you are under debt review or debt counselling and no further bad credit info can be listed on your credit profile.

HOW LONG DOES DEBT REVIEW LAST AND HOW LONG WILL IT STAY ON YOUR NAME?

Debt review can last anywhere from 2 to 5 years depending on your debt and your repayment amounts. The credit bureaus are legally required to remove the "under debt review" status from you credit profile within 21 days after they have received notification that you have paid all your debt and that you are no longer under debt review.

CAN I APPLY OR GO UNDER DEBT REVIEW TWICE?

It is possible, but if you did not complete your first debt review process, it makes things very hard. Some creditors may not want to be part of your second debt review process and if you owe your first debt counsellor fees, you cannot change debt counsellors.

CAN I UPGRADE MY CELLPHONE CONTRACT WHILE UNDER DEBT REVIEW?

If your cellphone contract is critical to your job and part of your debt review repayment plan you may be able to upgrade your cellphone contract. It is however critical that when you upgrade that you make sure that you stay within your debt review budget.

CAN YOU BE BLACKLISTED WHILE UNDER DEBT REVIEW?

No, you cannot be "blacklisted" whilst under debt review. But we want to first make it clear that there is no such thing as being "blacklisted". When you miss a payment it brings down your credit score, when you make a payment, it raises you credit score. You can however have a credit profile that shows that you are not a good repayer of debt.

CAN I GET A LOAN WHILE UNDER DEBT REVIEW?

Loans for people under debt review are not allowed according to the National Credit Act. It may be possible to get a loan from a loan shark, but those loan repayments won't be affordable which will most likely cause you to miss a debt review repayment instalment, which in turn could cause you to loose your assets. So it's critical that you don't take out additional loans.

WHAT IS RECKLESS LENDING

When a credit provider provides you with credit without actually checking if you can actually afford it. It can even be considered reckless lending if the consumer doesn't fully understand their responsibility and the risk that is associated with the credit provided.