People often ask us what it means to be legally protected under Debt Review. To understand this, let’s recap what Debt Review (also known as Debt Counselling) is. Debt Review is a process where a Debt Counsellor follows certain steps to reduce your debt repayment amounts. As well as minimising these amounts, they consolidate it into one single payment. This ensures that you can afford to make your debt repayments and cover your basic living expenses, without struggling financially every month.
This is a legal process governed by the National Credit Act (NCA) and regulated by the National Credit Regulator (NCR). The NCA was designed to protect consumers and uphold their rights, so creditors, debt collectors and debt counsellors don’t take advantage of vulnerable consumers. Often we hear about consumers being threatened by creditors and loan sharks. As soon as you sign up for Debt Review, creditors, debt collectors and loan sharks have to cease contacting you. They are also not allowed to take money from your account or “cash grab”. If they do attempt to contact you or collect money, you can notify your Debt Counsellor immediately, and he or she will deal the situation.
“84. (1) During the period that the force and effect of a credit agreement is suspended (a) the consumer is not required to make any payment required under the agreement; 15 (b) no interest, fee or other charges under the agreement may be charged to the consumer; and (c) the credit provider’s rights under the agreement, or under any law in respect of that agreement, are unenforceable, despite any law to the contrary.” National Credit Act [No. 34 of 2005]
The fact that you are legally covered, makes it safer than other debt solutions such as debt consolidation and payday loans to name but a few. It’s important to choose a qualified, Debt Counselling firm, registered with NCR, such as DebtCare to get the best result.
So when asked what does it mean to be under debt review, it means that you get financial protection and financial relief.
- You will be protected from creditors taking legal action against you
- Your debt repayments will be consolidated into one simple monthly repayment by a Payment Distribution Agency (PDA)
- You will pay lower monthly instalments
- Your assets are protected from repossession
- You will be well on your way to becoming debt free