Considering Debt Review

03 January 2022 ,  Charné Barnes 168

Debt review is also known as debt counselling and is described as a debt solution as it provides a solution to people in debt. The Debt solution is targeted to assist consumers who are overly indebted and who is struggling to manage their finances.

The National Credit Act introduces this rehabilitation program to prevent consumers from being placed under personal administration. Debt review has come as a one of the best solutions to consumers as it assists the consumer in that they do not have to deal with the long-term effects of personal administration.

This process was implemented to make sure that all debt counselors follow strict and ethical guidelines when assisting clients with regaining financial well-being.

The debt counselors’ asses the clients owing debts and implements a restructured debt repayment plan. This will be done through the process of renegotiating interest with the credit providers to reducing the interest and extending the debt repayment term.

A new plan which is affordable for the consumer is drawn up which provides guidelines on how to manage their finances.

The process entails that only one repayment is made to a payment distribution agency who is then responsible to make payment to the consumers credit providers. Consumers under debt review, are legally protected by the National Credit act.

The debt councilors should be registered with the National Credit Regulator (NCR) and the process  to kick start the consumers financial well-being, being reinstated is that the consumer consults with a debt Counselor and a monthly budget is made to cover all basic needs. All credit providers are requested to provide all information on all outstanding debts and a new repayment plan is drawn up and sent to all Credit providers.

Once the Credit Provider has agreed to the repayment plan the consumers will start making payments of the reduced monthly installment to the payment distribution agency.

Legal Documents is to be prepared and the plan is attached and sent to an Attorney who will issue same at the Court with jurisdiction to act in the matter The Consumer is to sign all Supporting documents including Affidavits which supports the documents issued an filed at the court. The Court will consider the documents, plans and provide the instructed attorney with a response and if satisfied issue a court order supporting the debt counseling.

The consumer will continue making payments and this will allow for the smaller debts to be paid off making more funds available for the bigger debt. Once all the debts have been settled the consumer may request that the debt counseling be terminated, and a clearance certificate be issued to notify all credit bureaus.