How Does Debt
Review Work:
A Comprehensive Guide
Ever wondered how does debt review work? Whether you’re starting the journey or looking to exit debt review, we’ll walk you through each step—from assessing your financial situation to negotiating with creditors and securing a court-approved repayment plan. With the right guidance and commitment, debt review can help you regain financial control. Let’s guide you every step of the way.
How Does Debt Review Work In South Africa
Debt review is a structured debt relief process put forward by the National Credit Act and regulated by the National Credit Regulator. It is designed to help individuals regain control of their finances by making manageable payments while protecting their assets. Here’s a breakdown of how does debt review work and what you can expect when starting your debt review journey with us:
1: Reach Out to Us
Getting started is easy. Just submit your details through our online contact form, and one of our friendly consultants will get in touch within 24 hours. As one of South Africa’s leading debt review companies, we’re here to help you every step of the way.
2: Assessing Your Finances
During the initial consultation, we’ll walk through your income and expenses to determine whether you are over-indebted (i.e., your expenses are higher than your income, making it hard to meet debt repayments). If you qualify, we’ll guide you through filling out a Form 16, which records your personal and financial details, including income, expenses, and all your debt obligations, including debt review loans. Good news: You don’t need to visit us in person—everything can be handled remotely, over the phone or online.
3: Notifying Credit Providers
Once you apply for debt review, we’ll notify all your credit providers and the credit bureaus. This notification, called a 17.1 notice, protects you from legal action for 60 working days, giving us time to work on your repayment plan. We’ll also request Certificates of Balances (COBs) from your creditors to confirm your outstanding amounts, interest rates, and repayment terms.
4: Creating Your Repayment Plan
With all the information from your creditors, we’ll develop a new repayment plan that fits your budget. The goal is to make sure your debt repayments are affordable while leaving you with enough money to cover your daily living expenses.
5: Negotiating with Credit Providers
Our experienced team will negotiate with your creditors to reduce your monthly instalments, lower your interest rates, and extend your repayment terms if needed. This ensures that your new repayment plan is realistic and sustainable, helping you stay on track without unnecessary financial pressure.
6: Securing a Court Order
Our specialist attorneys will submit your new repayment plan to the magistrate’s court for approval to make your new repayment plan legally binding. Don’t worry—you won’t need to appear in court. Your debt counsellor will act on your behalf throughout the process.
What Happens Next?
Once your new payment plan is in place, all you need to do is stick to your monthly repayment schedule. With your creditors legally bound by the new agreement, you won’t face harassment, and your assets are protected from repossession.
When it comes to how does debt review work in terms of fees. There’s no need to worry about upfront fees either—our service fees are included in your restructured repayment plan, so you can focus on paying off your debt and working towards financial freedom, also free from the temptation of obtaining further loans under debt review.
How To Get Off Debt Review
Figuring out how to cancel debt review successfully allows you to rebuild your credit profile, access new credit when you can afford it, and work toward long-term financial well-being. But it’s important to follow the right process to avoid complications along the way.
Two Ways to Cancel Debt Review: How Does Debt Review Work?
If you’re asking yourself how does debt review work when it comes to cancelling, there are two ways to cancel debt review and access loans for debt review clients, depending on where you are in the process:
Before the Court Order Is Finalised:
- If your financial situation improves, you can provide new evidence to your debt counsellor and the court.
- This may allow you to exit the debt review process early, but it requires close coordination with your debt counsellor.
- If you’ve already agreed to a repayment plan through the court, the only way to exit is to complete your repayments.
- Once all your unsecured debts are paid, and you are up to date with any long-term loans (like a home loan), you’ll receive a clearance certificate from your debt counsellor.
What Happens After You Get Your Clearance Certificate: How Does Debt Review Work?
So how does debt review work after you receive your clearance certificate? Once your debt repayments are complete, your debt counsellor will issue a clearance certificate, which acts as proof that you’ve successfully finished the debt review process.
- Updating Your Credit Record: Your debt counsellor will send the clearance certificate to the credit bureaus, and they are required to update your credit profile within 21 business days.
- Free From Debt Review: Once your status is updated, the “debt review” flag will be removed from your credit report, giving you the freedom to apply for new credit in the future.
How Does Debt Review Work When Cancelling
How Does Debt Review Work and How Long Does Debt Review Removal Take?
The time it takes for debt review removal depends on several factors:
Your Debt Counsellor’s Efficiency: Choosing a proactive counsellor, like National Debt Advisors, ensures that your clearance certificate is issued without delays.
How Quickly Creditors Update Records: Your creditors also play a role by confirming your repayments. If they delay, it could impact how soon the debt review status is removed from your credit profile.
How Does Debt Review Work: Rebuilding Your Credit After Debt Review
Once you’ve exited debt review, rebuilding your credit is the next step toward long-term financial stability. Here are some tips to get started:
Pay Bills on Time: Build a positive payment history by paying all bills promptly.
Keep Credit Usage Low: Avoid taking on too much new debt to maintain a healthy credit score.
Check Your Credit Report Regularly: Make sure your debt review status is correctly updated and address any errors with the credit bureaus immediately.
How To Get Out Of Debt
Getting out of debt can feel overwhelming, but with a clear plan and determination, it is possible to regain financial control. Whether your debt stems from necessary expenses like a home loan, unexpected life events, or impulsive spending, the key is to take actionable steps toward paying it off. Here are some helpful strategies to guide you on your debt-free journey.
Make a Payment Plan
Start by listing all your debts in order, from the most urgent or high-interest ones to the least pressing. This could include credit cards, loans, or any overdue bills. Once you have a clear overview, prioritise which debts to tackle first, especially those with higher interest rates. Next, calculate how much you can afford to pay toward each debt each month, while still covering your basic living expenses. The key is to stick to this budgeted plan and make regular, consistent payments.
Set Up Automatic Deductions
Automating your payments is a great way to ensure you never miss a payment, which could otherwise result in late fees and more interest. You can set up automatic payments through your bank or directly with your creditors. By having your payments automatically deducted on time each month, you remove the worry of forgetting deadlines and keep yourself on track with your repayment plan.
Cut Costs to Free Up Money
Reducing non-essential expenses is a powerful way to free up extra cash that you can put toward your debts. Take a close look at your spending habits—such as dining out, subscription services, or impulsive buys—and find areas where you can cut back. Even small changes can add up and allow you to make larger payments toward your debt, speeding up your progress.
Change Your Spending Habits
To make lasting progress, it’s essential to avoid adding new debt. This requires shifting how you spend money and developing healthier financial habits. Start by identifying triggers or patterns that lead to overspending and make a conscious effort to spend only on essentials while sticking to your budget. Debt counselling in South Africa is an excellent tool to use to avoid new loans as there are no loans for people under debt review. The goal is to focus on eliminating your existing debt instead of accumulating more.
Consider Debt Counselling
If you’re feeling overwhelmed by managing multiple debts, debt counselling might be a helpful solution. It allows you to combine all your debts into one manageable payment, often at a lower interest rate. For best results, seeking advice from a debt counsellor who can explain how does debt review work and provide expert guidance tailored to your situation. They can help you create a repayment plan or negotiate with creditors, giving you a clearer path toward becoming debt-free.
Empowering Your Financial Future with National Debt Advisors
At National Debt Advisors, we believe that achieving debt freedom is just the first step toward lasting financial health. Our mission is to empower you with the tools and knowledge needed to make smart financial decisions beyond debt review.
We’re here to help you every step of the way—from starting the debt review process to completing it and beyond. Don’t hesitate to National Debt Advisors for advice and support at any point in your financial journey.
Remember, completing the debt review process is essential to avoid legal complications and protect your assets. Stay committed, and with the right guidance, you’ll be on the path to financial recovery and success with full comprehension of how does debt review work. Contact National Debt Advisors today.
