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Debt review (also called debt counselling) is a debt restructuring programme designed to assist consumers who are over-indebted. You are over-indebted if your monthly debt obligations are more than your monthly income, and you find yourself not coping and even having to borrow money just to get from month to month.
Before you can be placed under debt review, you need to approach a debt counsellor who is registered with the National Credit Regulator. You will be required to sign certain forms, where you give consent to be placed under debt review. The debt counsellor will then assess whether you are over-indebted or not. If you are, the process of debt review will begin.
The process begins with the debt counsellor conducting an assessment to determine if you are over-indebted or not. If not, the process ends and you will need to continue paying your debts. If you are over-indebted, the debt counsellor will notify your creditors and request all credit bureaus to place the debt review flag on your credit profile. Once your profile has been flagged, you will be unable to apply for further credit and your creditors will also be prohibited from taking legal action against you.
The debt counsellor will draft a debt restructuring payment plan and submit it to the court, as well as your creditors, for approval. If the payment plan is approved, you will pay one lump sum to a payment distribution agent. The distribution agent will be responsible for making the monthly payments to your creditors until all your debts are fully paid off.
You cannot be removed from debt review and or have the flag removed from your credit profile until you have paid off all your creditors (this includes any vehicle finance agreements, but not a mortgage bond) and you are issued with a clearance certificate or you can prove that you never consented to being placed under the programme.
Scorpion’s Specialist Personal Finance Department is well equipped to assist you with debt review matters. Contact us on our 24/7 legal contact number 0861 333 333.
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* This is only basic legal advice and cannot be relied on solely. The information is correct at the time of being sent to publishing.
Date added: 18 November 2022
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