How Does Debt Review work

Debt review or debt counselling could bring one welcome financial relief. A person
experiencing financial difficulties knows just how stressful this is for both himself and his
family. Financial stress can cause havoc in a relationship. A person who is over-indebted is
one who cannot meet his monthly financial obligations. An example would be using his
credit card for day-to-day living expenses, borrowing money periodically from friends and
family members, or borrowing from a micro lender. These are indications that one is over-
indebted. Rather than allowing the situation to spiral out of control, debt review could be
the answer.

The debt review process

Debt review can begin by scheduling a meeting with a registered debt counsellor. A debt
counsellor will first draw all the necessary information from the credit bureau, provide the
client with an application form and request for documentation, and explain the process. He
will advise all relevant parties that the client is under review. In addition, he’ll engage a
Payment Distribution Agency (PDA) that will be responsible for distributing the client’s
payments to creditors. Furthermore, the debt counsellor will obtain agreement on an
affordable repayment plan from each of his creditors. Once this is in place, the client then
pays an agreed amount to your PDA and this is distributed to the creditors. After he has
repaid all of your debt, he is issued with a Clearance Certificate. Thus, the client’s credit
record is then clear, once again. The debt counsellor explains the entire process, step by

Benefits of undergoing debt review

  • One monthly, reduced payment
  • Protection from creditors and credit bureaus
  • Safety of assets from legal action
  • Disciplined path towards becoming debt-free
  • No permanent record of debt review status

Debt review began in 2007 through the Nation Credit Act to assist consumers to restructure
the debts with a qualified, registered counselling firm. Many South Africans have benefitted
from debt counselling, allowing them to live without the intense burden of debt that takes
away money from their living expenses. Debt review has also been instrumental in providing
an opportunity to consumers to learn more about careful planning.

If you need assistance, or more information about debt review, speak to One Debt today.