Debt Review also known as Debt Counselling is a formal legal debt relief measure that was introduced by the South African government under the National Credit Act (NCA) 34 of 2005. Debt Review was introduced to assist over-indebted consumers struggling to service their monthly debt commitments. As part of the Debt Review process, a Debt Counsellor develops an affordable repayment plan for a maximum period of 60 months which is put to the credit providers. The benefits of Debt Review include getting debt under control while protecting your assets from repossession as well as unlocking cash to meet your monthly living expenses. The Debt Review program came into effect in 2007.
What happens when one misses payments while under Debt Review?
When one is under Debt Review it is imperative that they pay the monthly restructured/agreed monthly contribution as per court order. Missing monthly payments will result in credit providers terminating the accounts from debt review and taking legal action.
In some instances, credit providers demand that the consumer settles any arrears accumulated before they can reinstate the account on Debt Review. Settling any arrears is very difficult for consumers that are already struggling and, in some cases, where motor vehicle finance is accounts are involved may lead to repossession.
Can one apply for more credit while under Debt Review?
In terms of section 88(1) of the National Credit Act No. 34 of 2005, you must not incur any further charges under a credit facility or enter any further credit agreement whilst under Debt Review. Doing so will result in you being rejected from the Debt Review, and legal proceedings from your credit providers will be instituted. As a show of commitment to the program, you will be asked to destroy your credit cards. Remember, this is what got you into trouble in the first place.
Contact us today and speak to one of our well-trained Debt Review Advisers. We will together review your financial position and reduce your monthly obligations to levels that you can afford.