Trained professionals called Debt Counsellors will help you to deal with your debt. These experts have been trained in dealing with debt and understanding the National Credit Act.
Once you decide to begin debt review, your Debt Counsellor will deal with your creditors on your behalf. They will let the credit providers know that they must stop pestering you.
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.
They will then confirm this information 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.
They will then send this 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.
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).
The courts then make an order restructuring your debt and perhaps even suspending any illegal or “reckless” credit agreements.
Please note: Though it hardly ever happens, you may not actually be “Over-Indebted” and so don’t really need “Debt Review”. You may just need some advice. In this case the Debt Counsellor will assist you to work out a better monthly budget which will enable you to repay your debts effectively.
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).
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.
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.