What is debt review?

In 2007 the South African government introduce a new National Credit Act. These new laws were aimed at helping protect consumers’ rights and balancing them with the need to repay debts to credit providers.

Part of the new Act (know as the NCA) was a way for consumers, with debt problems, to repay their debts responsibly but much more manageably. This was called debt review. The NCA mad provision for people to get help from trained individuals who would be able to both advise them of their rights and ensure that credit providers were getting regular, reasonable repayments. These trained and registered individuals are called Debt Counsellors. This is why debt review is sometimes called debt counselling.

The basic idea of debt review is for a consumer to go to a Debt Counsellors and get advice on their monthly household budget. The budget ensures that all basic needs are taken care of first before the debt is considered. After adjusting the budget, the Debt Counsellor then gets all the available information about the consumer’s debt from each credit provider. A new comprehensive plan is then created to repay the debt. Using a fair and reasonable amount each month which the consumer can actually afford. Normally, the plan will involve paying a lot less each month on each debt, but over a longer time period. The plan is then put before a Magistrate who turns the plan into a court order.
Consumers then make regular monthly debt repayments and the debts slowly reduce over time. Many credit providers kindly agree to charge much less interest and don’t charge monthly fees which helps their clients get out of debt faster. The debt review lasts as ling as the consumer needs it. If their situation improves, they are able to leave debt review. After the planned amount of time is over and after checking all the balances are at zero, the consumer gets given a clearance certificate saying they have no more debt or that they no longer need debt review.

This process has been a great help to consumers during one of the hardest financial times in recent history. It has also helped credit providers get their money back in a reasonable manner and amount of time. If you are experiencing a lot of stress over repaying your debt, then you should consider if debt review can perhaps help you. Why not talk to your local Debt Counsellor and get some professional debt advice?