If you are experiencing debt stress then debt review may be the right option for you but how does it work and how can it help you?
This is what the process looks like (an over view):
Step 1: Make Contact Get Help & Advice
This is often the hardest step for many. If you need help, then why not get it from a trained professional who knows how to use the law to your advantage. Reach out to a Debt Counsellor.
Step 2: The Debt Counsellor Begins a Debt Review
Your Debt Counsellor will now deal with your creditors on your behalf. They will let the credit providers know that they must stop pestering you by sending out specific forms and emails to the right people and they will notify the National Credit Regulator.
Your Debt Counsellor will discuss with you your income, your expenses and your debts. This is part of what is called a debt review. They review your debt.
Step 3: Your Credit Providers Send Information
Each of your credit providers will provide the Debt Counsellor with up to date information. They may even ask for contract documents and other information about your debts.
Step 4: The New Plan
Your Debt Counsellor will then confirm this information (from both you and the credit providers) and then try come to come up with a new, better, plan that allows you to:
(1) cover your necessary monthly living expenses and
(2) use what is left over to pay your creditors back what you owe.
Step 5: Who Likes it, Who Doesn’t?
The Debt Counsellor will then send this new an improved plan (a proposal) to each of your credit providers and see what concessions they are willing to make to help you get out of debt faster. Many will offer amazing low interest rates or waive fees to help you out.
Step 6: Start To Pay
You now begin to pay the one easy payment amount suggested by the Debt Counsellor. You will do this monthly throughout the entire process until your debts are settled. Any fees needed are taken from this monthly payment (not over an above this payment).
Step 7: Off To Court
Once they have responses from your credit providers they will then turn their proposal into a draft court order and give the suggestion to your local Magistrate (at court).
Step 8: Sign Those Documents
You will need to sign an affidavit (so that you won’t need to go to court in person). The affidavit shows you know about the plan and the debt review.
Step 9: Your Court Order
The courts then make an order officially restructuring your debt and perhaps even suspending any illegal or “reckless” credit agreements.
Step 10: Pay Each Month
Over time you will pay off your debt. Bit by bit. Month by month. You will make a single, easy to manage monthly payment (via a company that will help split up your payment to the right people at the right time and in the right amount each month. These companies are called Payment Distribution Agents. They are registered and monitored by the National Credit Regulator).
Step 11: Monthly Statements
Your Payment Distribution Agent will provide regular, monthly statements of how your one easy payment has been split up. You can compare these with statements from your credit providers and your Debt Counsellor can help you sort out any differences that may show up due to mistakes by the credit provider (yes, they make mistakes).
Step 12: Small Debts First
As smaller debts are paid up the monthly amounts that were set aside ofr those debts can be moved over to paying off the bigger debts. This greatly speeds up the debt repayment process. It starts slow but gathers speed and soon all your debts will be settled.
Step 13: Time To Finish Up
Once your small debts are settled you will only have bigger debts left. These will quickly get paid off and you will be able to finish the process once you only have a bond left. If you don’t have a bond then you will finish once all your debts are paid up.
Step 14: The Clearance Certificate
Once your debts are paid off, your Debt Counsellor will confirm with each credit provider that the accounts are paid up and closed and will then issue a clearance certificate. This is sent to your credit providers, the National Credit Regulator gets notified and so do all the credit bureaus. You will also get a copy.
Step 15: You Can Use Credit Again If You Want
You will then be debt free and can choose to use or not use credit again in the future. No record of your debt review or the debt counselling will remain at the credit bureaus.