Debt review is a legal magistrate court process that is used to help persons that find themselves in a financially difficult position to be helped to repay their debt thru smaller monthly instalments.
This process is not Administration of Sequestration and was designed to bring a consumer out of debt much faster and leave them with a clean credit record.
A debt review counsellor is able to contact each of your creditors and negotiate with each creditor to lower your monthly repayment amount, to lower the interest rate currently being levied and to waive any outstanding late fees. In certain instances, debt review counsellors are able to negotiate part or whole of individual debt is forgiven, prescribed or declared reckless.
This process is especially successful if consumers have assets that are currently in arrears on payments, but prior to the consumer being summoned to court because of failed payments.
It is, therefore, essential that you seek assistance from a trustworthy debt review company that has the necessary accreditation/experience as unfortunately there are practices that fail to meet required standards, charging unlawful or unreasonable fees and failing to provide affordable solutions for consumers taking advantage of debtors that are already struggling.
5 EASY STEPS OF DEBT REVIEW
NCA 34 of 2005 Section 86&87
We have drafted this easy guide to help our clients have a better idea of what to expect when under Debt Review.
STEP 1: ASSESSMENT STAGE
Current as you just received this document to peruse.
This is the process where we assess your level of over-indebtedness, we will, with your consent, draw an XDS credit report which will give us more information about your creditors, we will also do a budget with you which will give us a picture of your living expenses. This information will then enable us to give you a reduced instalment for all your credit agreements (debt payments), which you can afford.
We will then advise you of the costs of debt review, make sure you understand the process of debt review, are happy with the reduced instalment. We will then ask you to sign an application form called a Form 16 which allow us to place you under debt review. We will also do a CONFIRMATION CALL with you which is a recorded call made to you, in this call we make sure you understand the information that you agreed to in the Form 16. This also gives you another chance to enquire should you not understand something regarding the process. Our aim is to be transparent and make sure you understand the debt review process.
STEP 2: PROPOSAL STAGE
We will now notify your creditors that you have applied for debt review by emailing them a F17.1 form. If you have an email address you will also be copied into the email.
Your creditors will now give us updated balances and interest rates on your accounts.
We will also contact you to cancel your current debit orders and will get you to create a STOP ORDER with your bank to pay the Debt Review money over to the PDA every month on your pay date. DC Partner is the Payment distribution agency that pays your creditors every month while under debt review. They will email you a statement every month showing you the payments to creditors.
Remember that your creditors are not allowed to debit your bank account anymore, we will cancel the debit orders on your behalf. Cancellation forms will be mailed/faxed to you.
We then issue all your creditors with a detailed proposal on how we will restructure your debt with smaller monthly payments and lower interest rates.
We will then refer your file to our Attorneys, STEYN COETZEE INC based in Paarl, Western Cape
STEP 3: LEGAL STAGE
The legal team, STEYN COETZEE, will now handle your file with the objective to obtain a court order which will give you the legal right to pay your accounts off without legal prosecution.
They will draft an affidavit for the Debt Counsellor as well as an affidavit for you.
They will contact you to “oath” the affidavit at your closest police station and to return the affidavit to their offices.
The attorneys will get a court date at the magistrate closest to where you work (you don’t have to attend the court hearing)
They will represent you in court and obtain a court order.
STEP 4: PAYMENT PERIOD
You will be required to continue making reduced payments on a month basis until you are debt free. Your creditors will not harass you and cannot demand extra payments. The court order is in place and that is the only payment that is required. We will always be only a phone call away should you or family members need help or advice.
STEP 5: CLEARANCE CERTIFICATE
You have repaid all your debt. We will now issue a clearance certificate to all your creditors and to all the credit bureaus. The credit bureaus will wipe clean any negative information on your credit report and you can enter the credit market again. The circle is complete.