What is the debt review process

Debt Review is an application by a consumer to a debt counsellor to investigate the financial position of the consumer. Debt Review was implemented when the National Credit Act 34 of 2005 came into effect in 2007. Debt Review is also known as Debt Counselling.

If it is determined that the consumer is unable to, or may experience difficulty in, meeting all his financial obligations the debt counsellor places the consumer under debt review.

Any consumer can apply for debt counselling, upon which an assessment will be done to determine the state of over-indebtedness. If a consumer is found to be over-indebted, the Debt Counsellor will notify all creditors and negotiate with them in an effort to get the term of each credit agreement lengthened and/or the instalment reduced. In many cases, the Credit Providers even agree to a reduced interest rate.

Debt Sage's debt counsellors will notify all credit bureaus and credit providers that the client is now under debt review. The credit bureaus will then proceed by flagging the client's profile on their system as ‘under debt review’.

This ensures that the consumer is prevented from taking on additional credit. While under debt review, we are striving to rehabilitate the consumer from living on debt and hence adding more credit will be detrimental to the end goal.

A Debt Sage expert debt counsellor proposes and negotiates a debt re-arrangement plan with all credit providers for their acceptance. When all the credit providers accept the proposals, the debt counsellor will then apply to the Magistrate's Court to obtain a consent order on the re-arranged consumer's obligations.

The consumer will then have to pay the agreed amounts until the debt is paid off.

While a consumer is under debt review, a court order will protect the consumer from losing their crucial assets and keep the credit providers from taking legal action on accounts that are lawfully included in the debt review application.

Once the consumer has settled all their debt, Debt Sage's debt counsellors will send a clearance certificate to their creditor providers, as well as notify the National Credit Regulator (NCR) and the credit bureau via the NCR Debt Help system.

Accordingly, credit bureaus will be asked to remove the ‘under debt review’ status on the consumer’s profile, and the consumer is now on a clean slate to start taking out new credit.

Contact our Debt Sage debt review experts today, to review your case and see how we can help you.