What is debt review?
What is Debt Review
In the event that your monthly repayments on your house, car, credit cards and accounts have risen so high that your are facing blacklisting, one option is going into debt counselling or debt review.
This process was established through the National Credit Act(NCA) and benefits you in that legal action cannot be taken against you while you are in the process of debt counselling and paying off your debts through a reasonable repayment plan.
How does Debt Review work?
You will provide the debt counselor (DC) with the necessary documents and a list of your expenses.
The DC will determine if your payments are unaffordable on your current income.
The DC will determine how much you need to live on and what is available to repay your debts.
The DC will explain the whole process and all costs involved thoroughly and you will be able to ask questions.
There should be no up-front fees payable. The cost of the Debt Review application will be incorporated in your monthly repayment plan.
The DC will request certificate of balance (COB) from your credit providers.
The DC will inform the credit bureaus to list you as being under dent counselling. – This is NOT like blacklisting – it’s a protection. It will be removed completely once you have paid off your debt.
The DC makes a proposal to your credit providers with a reduction in fees and interest, if they all agree, a legal consent order will be obtained.
Once agreement has been reached the DC will give you the your final repayment plan and submit it to the National Payment Distribution Agency(NPDA).
The NPDA will receive the the monthly payment that you make and distribute it between the credit providers according to the repayment plan.
You are obligated to pay the monthly installment until the whole amount has been paid off.
The DC will then inform the credit bureaus to remove the debt counselling status.
Ensure that you use local debt counselors, and visit their office before you sign any documentation, there’s nothing worse them having a problem and not being able to find/contact your service provider directly.
THIS ARTICLE WAS PROVIDED BY:
VISAGIE ATTORNEYS
View Rustenburg Attorneys, Lawyers and Legal Services