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Debt Review

by Nadia de Weerdt Debt Review - Sandton Debt Counselling

Debt review is a process that helps over-indebted individuals manage repayments through a structured plan, negotiated with creditors, to avoid default.

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Debt review, also known as debt counselling, is a legal process introduced to assist individuals who find themselves unable to meet their monthly debt obligations. This process is designed to provide a way out for people who are over-indebted, helping them to avoid the severe consequences of defaulting on their loans, such as legal action, asset repossession, and a negative impact on their credit score.
The debt review process begins with an application to a debt counsellor, a qualified individual registered with the National Credit Regulator (NCR). The counsellor evaluates the applicant's financial situation, including income, living expenses, and debt commitments. If deemed over-indebted, the counsellor negotiates with creditors on behalf of the client to restructure debt repayments. This often results in reduced monthly payments and extended payment terms, providing the individual with immediate financial relief and a manageable way to pay off debt.

One of the key benefits of undergoing debt review is the legal protection it offers. Once under debt review, individuals are legally protected from creditors taking action against them, providing a safe space to work towards financial stability. This protection remains in place as long as the individual complies with the new repayment plan.

However, there are some drawbacks to consider. While under debt review, individuals cannot incur additional credit, limiting financial flexibility. The process also incurs fees for the debt counsellor's services, which are typically incorporated into the repayment plan. Furthermore, the extended payment terms might result in paying more interest over time.

Despite these drawbacks, debt review can be a lifeline for those drowning in debt. It offers a structured path to becoming debt-free, improves personal financial management skills, and relieves the immediate pressure of debt repayments.

Visit us on https://www.sandtondc.co.za/debt-review/debt-review-process/

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