Debt Review - What is a Debt Review and How Does it Work?

A debt review is a method that allows consumers to settle their debt in a more manageable manner. Instead of having to deal with multiple monthly payments, debt review allows consumers to make one monthly repayment to a payment distribution agency instead. These funds are then distributed to creditors and credit providers until the debt is settled. This method of debt relief is also protected under the National Credit Act.

 

However, a debt review is not right for everyone. There are many other methods of debt relief available. Some people get over-indebted for a variety of reasons. Some are retrenched from their jobs, while others face a divorce, gambling problems, or other life-style choices that lead to financial problems. A debt counsellor can offer an alternative solution to these problems and provide assistance in reducing arrears. Visit this page to get the excel monthly budget template south africa.

 

Once your debt review has begun, you must work with your debt counsellor to pay off your smaller debts first. This is similar to going on a diet, but instead of a crash diet, this plan allows you to pay off your smaller debts slowly over time. If you are successful in repaying all of these debts, you can leave the program. When you do, your Debt Counsellor will ensure that your bond arrangement with creditors is reasonable.

 

While a debt review program can help you reduce your monthly payments, it is essential to remember that if you fail to make payments, your new creditors will do an ITC check and take legal action if you fail to pay. This will negatively impact your credit score. This is why it is vital that you keep your source of income and contact your debt counselor to make sure you are on the right track to debt freedom.

 

Debt review plans last between three and five years. During that time, your debt counsellor will need to contact all the credit bureaus and let them know that you've gone through debt counselling. Once the debt counsellor has completed your debt review, your debt counselor will issue a Clearance Certificate that certifies your debt-free status. You should review this report to ensure the status of your debt review. If you find that your credit report has been altered, you can dispute the status with your creditor. Visit this site to educate yourself on how to save money on groceries in south africa.

 

The debt review process is an important part of debt relief in South Africa. It helps consumers overcome financial problems and avoid being blacklisted. As part of the National Credit Act, debt review was introduced in South Africa as a formal legal relief process. It aims to help consumers with excessive debt and identify reckless lending practices. It is a much better and safer option than taking out a consolidation loan, which can cause more debt.

 

The process can be a lifeline for those consumers who are seriously in debt and unable to pay their debts. However, debt review is not voluntary and consumers must adhere to the guidelines set by the National Credit Regulator. For a general overview of this topic, you may need to check out this post: https://en.wikipedia.org/wiki/Credit_counseling.