Debt Review: The Complete Guide
The debt review process can seem complicated, but with Debtline as your financial partner, the road to a debt-free life is uncomplicated, less stressful, and, most of all, based on what you can afford. South Africa’s leading debt review specialists are on your side.
The term ‘debt review’ doesn’t have to be something that sets your teeth on edge. If you find yourself in a financial situation that has you in a bind or your debt is overwhelming, debt review can help you breathe a little easier.
What is debt review
Debt review helps eliminate debt that could be holding you back from flourishing financially. Being over-indebted doesn’t have to be a life sentence when services such as debt review are available.
Being under debt review means you are protected by the National Credit Act (NCA), introduced in 2007. As a result, you can consolidate what you owe into a single payment to make handling your debt easier and offer you peace of mind.
Services such as Debtline are available to assist you in understanding how debt review can work for you.
Debtline will also negotiate your repayments on your behalf and work with you to create a monthly payment plan that suits your budget.
What happens under debt review?
Dealing with severe debt can be stressful, and being over-indebted can affect many parts of your life. If considering whether or not debt review is a good idea, it’s important to remember that the choice is entirely up to you.
Suppose you’ve attempted to get out of debt with careful budgeting, self-discipline, and loan consolidation through banks or other institutions. In that case, debt review may be the logical next step.
Get out of debt
When your debt outweighs your budget on a regular basis, working with a company like Debtline can help you be in a better position going forward. This means you can tap into the benefits provided by debt review without the stress of debt collectors knocking on your door.
In fact, debt collectors will be forced to work through the debt relief organisation rather than attempt to contact you directly.
Benefits of applying for debt review
- Make the most of expert advice and debt counselling.
- Have an expert assess and create a budget that works for you.
- Avoid being blacklisted by banks and financial institutions.
Don’t let creditors harass you for monthly payments.
- Have your debt and repayments negotiated on your behalf.
- Convert multiple debt payments into one reduced monthly repayment.
- Gain control of your financial situation with peace of mind.
- It may sound almost too good to be true, but with innovative services such as Debtline at your fingertips, it doesn’t have to be impossible to be debt free.
Debt review: 5 most important facts
Here are a few critical factors to keep in mind when choosing to undergo debt review.
- Debt review isn’t forever – You may wonder if debt review can be cancelled, and the answer is yes. But only under very particular circumstances. Several factors need to be considered and taken into account before cancelling the debt review. It’s important to talk with your debt counsellor before deciding.
- You can’t apply for credit when under debt review – The debt review process is about cutting debt from your life. This also means you won’t be able to apply for or accept any new debt while completing the process.
- You are not blacklisted under debt review – While you can’t apply for more debt while completing debt review, this doesn’t mean you are blacklisted. Instead, you will be listed as undergoing debt review, and debt collectors can no longer contact you. This will also save you from having to declare yourself insolvent or bankrupt.
- Your assets are safe from repossession – Under the National Credit Act, your car, home, and other assets are protected. It cannot be repossessed if you make your debt review repayments.
- Paying off debt may take longer than planned – Being under debt review means working out a monthly payment plan that works for you. Because these repayments may be pretty low (based on your budget), paying off your debt may take slightly longer than you planned. While this may be the case, the low repayments will mean you can continue your life without the stress of being held down by lingering debt.
The debt review process
Once you decide that debt review is for you, getting started isn’t complicated. However, when working with a service such as Debtline, you’ll need to complete a few steps before making your first repayment.
Part of the service we provide our debt review customers is helping you on the journey of becoming debt free – and staying that way. If you continue to meet your repayment obligations, you can be debt free within 60 months or less.
Debt review is about taking ownership of your finances and working to make meeting obligations as pain-free as possible. You don’t have to suffer in silence or drown in debt forever; simply reach out and let the debt review process work for you.
Debtline debt review steps
Step 1 – Contact Debtline via our on-site form, and we’ll call you back. You can even tell us the best time to do so.
Step 2 – Provide us with all the information and documentation needed to assess your financial status and debt owing.
Step 3 – If it’s decided that debt review is the right fit for you, we will work with you to create an affordable repayment plan. This will be an amount you pay back each month based on negotiations with your credit providers and lowered interest rates. Again, we do all the work for you, ensuring you get the best possible debt readjustment and repayment amount.
Jump to Debtline’s debt review process.
Are Loans for Debt Review Clients Legal?
Being under debt review may feel like you’ve been cut off from many normal parts of life – purchasing clothing on an account, applying for a home loan, or buying a new car. All of these things require extra cash and approval by a creditor. If you’ve taken the step to apply for debt review, that means you’re probably wanting to seriously work towards being debt free. It’s not easy, and it definitely takes sacrifice, but the payoff is so very rewarding. We understand that there may be times when you need extra cash to achieve your goals. But is it possible or even legal to apply for a loan when you’re a debt review client? Let’s find out.
Is it legal to get a loan while under debt review?
According to the laws laid out by the National Credit Act, it is not possible to get a loan while under debt review. This would be a form of irresponsible lending. It makes no difference if that loan is a short-term bump to get you to payday or a long-term loan to purchase a house. Being under debt review means you are already struggling to pay your current debt obligations. Being over-indebted and taking on more debt is not legal or responsible when you’re a debt review client.
Once you have completed the debt review process and completely paid off your outstanding loans, your name is no longer on the register, and your credit history will be clear. You can then apply for loans that you can afford and that won’t cause you to be over-indebted again.
What about shady loan sharks?
A quick Google search will reveal that dodgy “companies” with zero ethics will happily provide loans for those under debt review. You may have seen pamphlets or received texts that say things like:
Under Debt Review, Admin or Bad Credit? Get a Loan!
Need Cash Quick? Apply for a Loan – No Credit Check Required!
Instant Loans for Debt Review and Blacklisted Customers!
These companies are nothing more than loan sharks who do not abide by the same rules and regulations created by the National Credit Act or National Credit Regulator. Without the NCA or NCR enforcing these rules (as they do with accredited lenders), these businesses can charge high-interest rates and give money to those who can’t afford to pay it back. Avoid going this route as it can lead to dangerous situations and may even have you missing your debt review payments. By missing your payments, you’ll forfeit your right to protection from your creditors, and your debt will be yours to pay off in its entirety once again. Don’t let a quick fix that could result in a long-term disaster tempt you.
The best way to manage your debt and ensure that you have the funds to meet your needs while overindebted is to work with Debtline. We’ll walk with you through the debt review process and help you keep your eye on the prize of being debt-free.
Car repossession rules: Is your car safe under debt review?
If you have no experience with how debt review works, you probably want to know what the car repossession rules may be. Will your car be safe? Does being under debt review mean giving your vehicle back to your creditors?
We know it can be intimidating when all you want to do is protect your assets. Keep reading, and you’ll find the answers you need.
Car repossession laws in South Africa
For many over-indebted people, the idea of applying for debt review is scary. Without knowing the rules, you may assume you’ll lose your assets and have to turn over your most valuable possessions to your creditors.
The great news is that the exact opposite happens thanks to the National Credit Act (NCA).
The South African government created the National Credit Act to protect the assets of those who need help clearing their debt while under debt review. Thanks to the laws in place, assets are completely covered. This means repossession of your car while under debt review is illegal.
While under debt review, a counsellor will communicate with your creditors and ensure that your repayments are manageable. Here at Debtline, our counsellors will work to cut down your interest rates and the amount you need to pay each month. The aim is to get you debt-free as quickly as possible while protecting your assets and maintaining your monthly needs.
When can a car be repossessed in South Africa?
Unfortunately, there are instances where debt review cannot protect your assets, and your creditors may repossess your car. While this is not the ideal outcome, certain processes are in place that function outside of what debt review can protect.
Protection under debt review does not apply when:
- You’ve received a Section 129 Letter of Demand more than 10 days prior.
- A summons is served relating to your car (or house mortgage).
- You’ve missed a payment, and your debt review lapses.
- Creditors have already claimed your vehicle.
In these cases, you will need to go through the legal channels available to you, as being under debt review is no longer an option.
Can you get a car while on debt review?
One of the most important rules to remember is that when you are under debt review, you can not obtain any more debt. This means that a legal and trusted credit provider may not offer or give you more debt than you already have, including financing a vehicle.
While other options are available, such as buying a car in cash or using a lend-to-own service, it’s best to pay off your current debt first. Even small extra payments that can be made towards your debt counselling total can make a big difference in the long run.
Want to know more? Let Debtline help you navigate the world of debt review and being debt free..
Debt review removal guidelines
Removal from debt review could be complicated and require you to adhere to strict guidelines. We’ve broken down the process to help you to exit successfully. Once a court has confirmed that you are over-indebted and qualify for debt review, only a judge can reverse that decision. This means there is a long process ahead, and you can only remove debt review status from your financial profile if you follow it carefully.
Before the debt review removal process
Before you start the debt review exit process, here are a few pointers to keep in mind. Take these points to heart and ensure that you are 100% prepared and able to leave debt counselling.
- 1. Reduced instalments will fall away: Once you leave debt counselling behind, the agreements negotiated by your debt counsellor are null and void. You will have to return to making full payments to your creditors.
- 2. Waivered fees will return: A debt counsellor will negotiate with companies to waive certain fees and penalties. When you exit debt review, this ends, and all fees will apply along with your monthly instalments.
- 3. Creditors can once again take legal action: As you are no longer under the protection of debt review, creditors can choose to take legal action and claim all you owe them. This can result in legal fees, loss of income, and much more.
If you are ready to tackle all these consequences, you can start the exit process by following the steps listed.
How to withdraw from debt review
There are specific steps required before you can withdraw from debt review. This will mean seeking legal advice as a debt counsellor has no control over this process. Depending on your financial status and whether you’ve paid all of your outstanding debts or not, this process differs. If you have been declared over-indebted, as is the case for anyone under debt review, you must complete the following steps.
1. You can exit debt review by contacting your debt counsellor and informing them of your decision. You will then need to have your debt review/over-indebted status rescinded by a court of law.
2. A debt counsellor can recommend that you are over-indebted or not, but once you have submitted all of the necessary documentation, a Magistrate will have the final say.
3. You must include financial documents to prove that you are no longer over-indebted. This is only done under specific circumstances, and rejection is possible if you do not meet all of the criteria. Your debt counsellor will be able to provide specific criteria for you based on your marital status and current state of over-indebtedness.
4. Once a Magistrate confirms that you are longer over-indebted, your debt counsellor will receive a form and a copy of the court order. This will be sent to all relevant financial institutes to remove the debt review flag from your profile.
You should note that any fees incurred during this process will be payable by you. It is also not a guarantee that once you start this process, you will be granted an exit from debt review. This will depend entirely on the Magistrate and your financial status.
If you’re unsure how to proceed or need questions answered about this process, contact your Debtline counsellor for more information.
What happens if you skip a debt review payment
Are there consequences, and what exactly happens when you skip a payment while under debt review? The National Credit Act of 2005 is in place to ensure that those who need a helping hand can navigate their debt without drowning. Overindebted consumers can use the NCA and contact debt relief counsellors, like Debtline, for a way forward rather than attempting to fix their debt independently.
Once you go under debt review, a contract is set in place that does two things:
- 1. It helps you convert your debt into an easy, single monthly payment.
- 2. It protects you from creditors and has a professional debt counsellor stand between you and those who will attempt to harass you for payment.
While both of these points are wonderful, it does mean that both parties must uphold the contract. Debt review companies such as Debtline do their part to keep you safe while you repay your debts every month.
There may come a time when you can’t make a payment for one month. If that happens, we’ve answered the most asked questions on the topic.
Can I skip a
debt review payment?
The short answer is no. Skipping a debt review payment shouldn’t be an option or a consideration once you’ve entered into a debt review agreement.
More than just a formal agreement, debt review is a process that requires legal steps, and to keep that process running smoothly, monthly repayments must be made without fail. The legal process includes a court order and the acceptance of this order by all of your creditors.
What happens if I skip a payment while under debt review?
The first thing that will take place is that your debt review and the protection it provides will end. This means you will be utterly vulnerable to creditors who want their debt repaid. As is their legal right, creditors will once again start contacting you for payment, and if you cannot meet those requests, they can start legal proceedings.
Once underway, a court could decide that your car must be sold to fulfil debts or that a garnishee order will take payments directly from your salary. This is not a situation you want to deal with, and it’s not easily fixed.
What should I do if I can’t
make a debt review payment?
If you find yourself in a situation where making a debt review repayment is impossible, it’s imperative to contact your debt review counsellor before this happens. Keep your counsellor updated with every issue that may arise and work with them to find a solution.
If you want to be truly debt-free, then committing to monthly repayments is the only way forward.
If you find yourself in the deep end of dealing with debt, contact the professional debt review counsellors at Debtline and get the help you need.
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