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Being over indebted is naturally not ideal. Having too much debt and
not enough money each month to pay off debt is not only stressful but
can involve legal action taken against you by your creditors.
A debt review may assist you in becoming debt free. The initial process
involves:
- Making an appointment with a debt counsellor
at an accredited financial
institution. In South Africa, consumers have the
right to apply for a debt review as is stipulated in the National
Credit Act 34 of 2005.
- In order to start the debt review
process you will have to complete a form with the help
of your debt counsellor.
- The completed
form is sent through to your creditors to inform
them that you have undertaken a debt review.
- Your creditors
will then communicate to your debt counsellor any outstanding
monies owed to them.
- Once all the information regarding
your debt has been obtained, the debt review process
takes place.
Whilst the debt
review process is in motion no legal
action may be taken against you by your
creditors. Your debt counsellor will act as a mediator
between you and your creditors and will negotiate
on your behalf. You may expect them to
negotiate things like lower interest rates and longer
payment terms.
Remember, each debt review process is different
and it will be up to
you to work closely with your debt counsellor
and adhere to the new repayment terms
offered to you. Often debt reviews entail
consolidating your debt, which means all your debt
will be paid off with one payment for a fixed time
period.
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