Debt review was formally introduced by the National Credit Act, No. 34 of 2005 to assist consumers having difficulties in servicing their debts. The terms debt review and debt counselling can be used interchangeably. The debt review program came into effect in 2007.
What happen when one misses payments when under debt review?
When one is under debt review it is imperative that they pay the monthly restructured / agreed monthly contribution as per court order. Missing monthly payments will result in credit providers terminating the accounts from debt review and taking legal action.
In some instances, credit providers demand that the consumer settles any arrears accumulated before they can reinstate the account on debt review. Settling any arrears is very difficult for consumers that are already struggling and, in some cases, where motor vehicle finance is accounts are involved may lead to repossession.
Can one apply for more credit when under debt review?
In terms of section 88(1) of the National Credit Act No. 34 of 2005, you must not incur any further charges under a credit facility or enter any further credit agreement whilst under debt review.
Doing so, will result in you being rejected from the debt review and legal proceedings from your credit providers will be instituted. As a show of commitment to the program, you will be asked to destroy your credit cards. Remember, this is what got you into trouble in the first place.
Contact us today and speak to one of our well-trained consultants. We will together review your financial position and reduce your month obligations to levels that you can afford. Debt review is your best chance to get your debt under control while protecting your assets from repossession.