Thanks to the recent economic crisis, people are more familiar with debt than they would like to be. Unfortunately, they are also applying for debt review for all the wrong reasons; thinking they can avoid their debts when they really need to confront them with lifestyle changes.
What does it mean to be under debt review?
Debt review was introduced in 2007 with the National Credit Act and is there to assist people who are battling with their debt – through repayments on their houses, cars, credit cards and accounts and are facing possible blacklisting and / or repossession.
Being under debt review means you have appointed a debt counsellor, who has determined that you are over-indebted.
The debt counsellor would have informed your creditors and the credit bureaus and drawn up an interim repayment plan. This plan would be submitted to a registered payment distribution agency (PDA).
Once your creditors accept the revised repayment plan, legal action cannot be taken against you.
Once all your debts have been repaid, you will be issued with a clearance certificate by your debt counsellor and they will notify the credit bureaus that you are no longer under debt counselling.
Debt counselling is not like blacklisting and any record of being under review will be removed from your credit record once the process has concluded.
So what should I do if I’m under debt review?
While under debt review, you should stick to the repayment plan and not put your debt review programme at risk. Remember, debt review is not a blacklisting but a protection that was put in place to assist those that are debt stressed.
It will be removed completely once all debt is paid off.
And what shouldn’t I do when under debt review?
When you’re under debt review it is important to stick to your repayment plan as skipping a debt review agreement payment will cancel the agreement.
You should also not use your credit cards or apply for unsecured loans as this will put you at more risk of having your whole debt review programme terminated.
You also won’t be able to get a legal, registered loan while you are under debt review.
Reasons why you SHOULD GO under debt review
- The debt review process involves extending the term of repayment and reducing the amount of your monthly instalments. You can then keep up with them- as well as afford your essential living expenses.
- Debt review protects you from losing your property and assets. Once your creditors accept the revised repayment plan they are not allowed to take legal action against you
- If you are under debt review and the interest you owe increases to the point where it’s equal to the original amount you owed, your credit provider can’t charge you any further interest by law.
- You get a clearance certificate and a clean slate at the end of it.
REMEMBER! Debt review is not a way of financing a lifestyle beyond your means, or a quick fix that will get you out of paying off your debts. Our team at Meerkat will present you with options that are designed to improve your financial circumstances, not to put you deeper in debt – so Contact us today!
Reasons why you SHOULD NOT CANCEL your debt review
- Your original interest rates and other contractual terms will apply again.
- Credit providers will be able to take legal action against you once again.
- You will no longer be on your way to rehabilitation, but will only continue to get into more debt.
- You won’t be moving towards getting a clearance certificate anymore.
- Your credit profile will be adversely affected.
- You may be rejected for certain positions of employment, should you apply for them.
- You will be rejected for loans at reputable financial institutes.
So contact Meerkat today and we’ll get you well on your way to becoming DEBT-FREE!