Debt review, otherwise known as debt counselling, is a debt resolution strategy aimed at South African consumers who are heavily in debt and having trouble managing their finances.
The National Credit Act (NCA) introduced this formal debt rehabilitation program to prevent consumers from falling into personal administration and facing its long-term consequences.
The goal is to ensure that debt counsellors adhere to strict and ethical standards while helping clients regain financial stability.
During debt review, a debt counsellor will assess a client's outstanding debts and create a revised debt repayment plan by negotiating lower interest rates with credit providers and extending debt repayment terms.
A debt counsellor will also develop a new, feasible monthly budget and payment plan to guide the client's spending.
Moreover, the debt review process involves the client making a single monthly debt repayment to a payment distribution agency, which then pays all of the client's credit providers. This simplifies the burden of keeping track of multiple debt payments.
Debt review can provide several advantages, including:
Reduced monthly payments: Debt review can result in lower monthly payments, making it easier for you to manage your debts and avoid default.
Protection against legal action: When you enter debt review, your creditors cannot take legal action against you, which can provide relief from the stress of dealing with legal proceedings.
Consolidation of debt: Debt review can consolidate your debts into a single monthly payment, making it easier to manage your finances and stay on top of your payments.
Extended repayment terms: Debt review can extend the repayment terms of your debts, giving you more time to pay off what you owe.
Budgeting assistance: Debt review provides access to debt counselors who can help you create a budget and develop a plan to pay off your debts over time.
It's important to note that debt review may not be the right solution for everyone, and it's important to speak with a financial professional before making any decisions about managing your debts.
The following are signs that someone may be in need of debt review:
Our attorneys can provide valuable expertise, representation, and protection for someone undergoing debt review. We can help ensure a fair and legal outcome for the consumer and give them peace of mind knowing that their financial future is in good hands.
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