Debt Review Explained

The purpose of debt review explained

The National Credit Amendment Act (NCA) introduced debt review in 2007 as a professional debt relief process. While under debt review, over-indebted consumers can reduce their credit debt incrementally, without having to face legal action from their credit providers for defaulting or falling into arrears. The NCA was created for the purpose of protecting consumers from reckless creditors and predatory lenders, who aggressively push their finance products, without considering whether or not consumers can afford to make repayments. In this way, consumers are trapped in a cruel debt cycle and have to pay off loans by taking out more loans, while the interest keeps on climbing. As follows, they live off of credit cards and fall ever deeper into debt with every passing month. The NCA outlines and enforces your consumer rights, providing you with legal recourse against credit providers, should they contravene the Act.

Applying for debt review explained

Applying for debt review firstly involves your debt counsellor assessing your credit agreements, living expenses and income to establish whether or not you are over-indebted. Over-indebtedness qualifies you for debt review. However, if you are close to going this way, National Debt Advisors can provide you with financial advice and budgeting guidance to help you manage your debts more efficiently. If you qualify for debt review, your debt counsellor will formally notify all of your credit providers that you are now undergoing debt review with National Debt Advisors, so they are barred from dragging you to court, for 60 days after being notified.

The process of debt review explained

During this time, your credit providers cannot get a default judgment granted against you, which means they can’t  repossess your assets or have a garnishee order attached to your salary, in order to recoup the money you owe. While you can’t afford to make your monthly payments, debt review really is the best thing for anyone and everyone who finds themselves in this very difficult situation. During your 60 days of protection, your debt counsellor will negotiate with your credit providers to arrange lower instalments and interest rates for you.

The benefits of debt review explained

Most of the time, credit providers will agree to lower your rates to avoid going to court because, as much as you don’t want this, neither do they. So, a new debt review plan will be drawn up for you that will run for a longer period. But, your monthly payments will be much smaller, so you can actually afford to maintain them! If you need help with your debt, simply submit your details to National Debt Advisors in the contact form to your right and we’ll call you back to discuss your options.