Debt Review is the process whereby a qualified Debt Counsellor assesses a client’s outstanding debts, consults with credit providers on behalf of the client and assists the client in establishing an affordable monthly payment plan that incorporates both earning and living expenses. Debt Review requires clients to make one monthly payment, which is then divided and distributed to all the clients’ Credit Providers.

The National Credit Act introduced Debt Review as a formal debt rehabilitation program, in order to help financially strained Consumers. It was also to help prevent Consumers from being placed into personal administration or sequestration and having to deal with the long term effects of that.

Consumers that are classified as “Over-Indebted” will qualify for Debt Review. To qualify a client needs to be employed and earning an income that can be directed toward living expenses and paying off their debts.

No, while a Consumer is under Debt Review the Credit Bureau will flag their profile as “Under Debt Review” which will prevent a Consumer from acquiring more credit. The aim of the Debt Review process is to settle outstanding debts first and only once these short term debts are paid will the Consumer be cleared from Debt Review and free to obtain further credit. At the end of the Debt Review process, the Debt Counsellor issues a clearance certificate to Creditors, the NCR and Credit Bureau who will then remove the “flag” which means the Consumer is free to borrow again.

As can be seen from the process there is a huge amount of work, knowledge and skill that goes into the process of helping a client into the Debt Review Process. A client pays these certain prescribed fees which have been regulated and published by the NCR and industry stakeholders.

What needs to be stressed though is that as per industry norms and agreements with Creditors the fees are initially taken from the amount that is available to Credit Providers in month one and two and only then are Credit Providers paid as per the re-negotiated budget and settlement proposal in month three. This is to ensure that the already Over-indebted Consumer or client is not excluded from the process because they can’t pay the fees that are required to get the process going and to ultimately get the matter to Court.

There is a small “after care” monthly fee which is also paid throughout the process because the Debt Counsellor continues to monitor and ensure compliance with the new budget.

No, everything is handled by Debt Council and your Debt Counsellor. We have a number of attorneys on record who attend to our Court appearances as and when necessary.

Under Debt Review, clients are legally protected, from Creditors as long as they continue to make their monthly payments, on time, every month.

Under Debt Review, clients are required to make one monthly payment only. The amount is then divided and distributed to all the clients’ Credit Providers. This would be a difficult process for the client to facilitate on their own, hence Debt Council is here to assist its clients every step of the way.

The National Credit Act (NCA) formally introduced Debt Counsellors as a qualified and knowledgable person to assist Consumers or clients in the process of Debt Review which can at times seem very daunting. They will do all the correspondence and negotiating with the Credit Providers and also assist the clients with the Court Application that is needed. The Debt Counselor’s aim is to empower clients to take control of their finances, as well as their future financial decisions.

If a Consumer pay off all their unsecured debt and are only left with their contractual bond repayment, the Debt Counsellor can still issue a clearance certificate and cancel the Debt Review process. This means that the”under debt review” flag will be lifted/cleared from the Consumer’s profile at the Credit Bureau. The Consumer will be free to borrow again.

Yes, all Debt Review cases must either go to the Magistrate’s Courts or the National Credit Tribunal, in order for the new negotiated payment plan to be made an Order of Court. This is in terms of the National Credit Act.

There are a few instances when a Magistrate may want a personal appearance from the Consumer but in the vast majority of matters, the case proceeds to Court by way of documentation and affidavit and then an appearance by an Attorney or Debt Counsellor.

• The Debt Review was developed and introduced as a positive rehabilitation process. In many positions, clients need to be able to show that they can manage their personal finances correctly.
• By voluntarily applying for Debt Review, clients are taking a responsible step towards repaying their debts, consequently reflecting positively on them.
• Clients failing to address their debt problem, having defaults and judgments against their name and possible garnishee orders arriving at their place of employment could look worse for them.
• At Debt Council we deal with clients from every industry. Most importantly however, the Debt Counselor’s dealings with clients are strictly confidential, and the client’s current employer will not be informed.
• For clients looking for a new job, if a prospective employer does a credit check and notices that you are under Debt Review, this should be viewed as a positive step towards managing your personal finances. If necessary, the Debt Counselor can provide letters stating that the client is under Debt Review and complying fully with the process.

If a the client misses a payment on that loan or any other loan he is not protected from any other Credit Providers. Under Debt Review, all of the client’s debts are re-negotiated in terms of the new payment proposal. He is protected from legal action by Creditors as long as he continues to make payments in terms of that plan each and every month until the debts are paid off.

Debt Consolidation loans are often not an option, as many have high interest rates attached which will inevitably deteriorate a client’s financial position further.

For debt consolidation to work, clients have to be sure that they are able to afford the monthly instalment every month. This can only happen if the client manages to secure a loan at a lower interest rate than they are currently paying on the debts they wish to consolidate. They also have to be sure that they are disciplined and able to meet all their repayments at their current interest rates and terms which is usually not the case. Debt Review takes all the client’s debts and re-negotiates more favourable interest rates and with longer terms so as to make the process of fulfilling all your financial commitments easier.