Can you skip payments while under debt review?

by | Jun 9, 2022 | Personal Finance

Often serving as a beacon of hope during the darkest of times, debt review was introduced by the National Credit Act of 2005 to assist overindebted consumers rehabilitate their finances whilst preventing credit providers from repossessing their assets. Through the process of debt review, consumers also acquire better financial management tactics, each day taking a step further towards their financial freedom.

However, economies are very unpredictable, markets could crash in a flash, socio-political factors might spring impossible fuel hikes momentarily, all of these things often have devastating effects on household finances and the cost of living in general. And when the going gets tough again and consumers find themselves financially strained again, many might wonder, can they skip their debt review payment?

Well the answer is no. Once you go under debt review, you enter into an NCA accredited process, that negotiates a monthly debt instalment that you can afford while protecting your assets. If you skip your debt review payments and your debt counsellor suspends their services, your creditors could take further legal action or repossess your assets. 

Debt review can be a rescue plan for any overindebted consumers struggling to meet their monthly debt obligations, however, its success relies entirely on whether or not the client completes the process. This means that you need to stick to every monthly payment in your repayment plan so that you don’t put your debt review agreement at risk.

Remember, when you go under debt review, a qualified debt counsellor assesses your outstanding debt and implements a debt repayment plan by negotiating for a lower monthly instalment with all your creditors. This single and affordable monthly instalment allows you breathing room to comfortably cover all your other household expenses. Also, when you are under debt review, creditors are informed and may not take legal action or repossess your belongings.

Should you skip payments, and your debt counsellor suspend their services, your creditors are free to seek other avenues for collecting the credit. They could terminate the debt review on the accounts and hand the accounts over to attorneys or debt collectors. Also, if creditors obtain judgements to collect the debt they will collect based on the original terms. This could be catastrophic for someone already facing financial difficulty.

Founder and Debt Counsellor at National Debt Advisors Sebastien Alexanderson advised debt review clients to never skip payments, and to rather reach out to their debt counsellor whenever they feel like they are struggling to meet their debt review instalments.

Our qualified debt counsellors work with creditors on a case-by-case basis, appealing to them to review each client based on the merits of their circumstance. This means that the reason behind the client’s lack of affordability is taken into consideration as well as their history and efforts taken into remedying their situation and committing to their debt repayments. We also work with clients in advising them to find other means of addressing their affordability issue. Professional and empathetic financial guidance is offered, and specific lifestyle adjustments are suggested to try and remedy the situation.

In terms of drastic changes in circumstances such as retrenchments, the National Credit Act outlines a process whereby your debt counsellor can negotiate for a grace period or some sort of concession with your creditors for a period of up to three months. Furthermore, at NDA, we offer our clients credit life insurance which can cover your debt repayments for a period of up to 12 months, provided you are up to date on your premiums and your waiting period has ended.

“Millions of people globally go through tough economic times and feel that they are no longer able to meet their debt repayments, if this is you, reach out to our debt counsellors today, they can assist you navigate through this challenging period of your life,” said Alexanderson.

If you are struggling to meet your monthly debt repayments contact NDA today, we can help.

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