15 Aug How Long Does Debt Review Last?
How long does debt review last? Well, it depends. Debt review lasts for 3 to 5 years but can be shorter or longer depending on how quickly you’re able to repay your debt. It’s a long-term solution. Patience and commitment to the repayment plan are essential to achieving your goal of being debt-free.
Debt review is a debt help system that provides relief to people who are over-indebted under Sections 86 and 87 of the South African National Credit Act. A debt counsellor assesses whether you’re over-indebted. If they find you’re over-indebted, they’ll issue you a Form 17.2, then notify creditors and the Magistrate court that you’ve applied for debt review. They’ll argue that you’re over-indebted to the court on your behalf. Then, they’ll negotiate with your creditors for reduced interest rates and lower debt repayments.
This blog post discusses the factors that play a role in how long you’ll be under debt review and how you can shorten your time under debt review. Debt help is here, make use of it!
Top 5 Things That Affect Your Time under Debt Review
There are 5 factors that influence how long you’re under debt review for: your total debt amount, your monthly income, your repayment plan terms, interest rates, changes in your financial situation, and economic conditions.
Total Debt Amount
The amount of debt you have will influence your repayment capacity and how long it will take you to finish paying the debts. Larger debts generally require longer repayment periods, and smaller debts usually take less time to pay off.
Monthly Income
The higher your income, the higher your repayment capacity– the amount of debt you can pay at any time. For example, someone who makes R20 000 per month with R100 000 of debt and R10 000 living expenses would be able to pay off their debt in as little as 10 months, whereas someone who makes R15 000 with the same living expenses would be able to pay off their debts in double the time.
Repayment Plan Terms
The negotiated repayment terms will affect how long it takes for you to finish repaying your debt. If your interest rates weren’t grossly reduced, you’re more likely to take longer to pay your debts than if they were much lower than initially agreed. Moreover, the negotiated repayment plan period will affect how long you’ll take to repay your debt. Generally, a longer repayment term means that you’ll be able to pay less per month. If you’d like to pay more on your debt to get debt counselling over and done with, ask to renegotiate your repayment terms to be shorter, granted that you can afford it.
Changes in Financial Situation
If you suddenly lose your job, become disabled, or are unable to work for another reason, your ability to make debt repayments will probably be greatly impacted. Similarly, a large salary increase or sudden inheritance would help you finish debt review a lot faster.
Economic Conditions
If inflation or interest rates go up, living expenses will probably become a lot harder to meet, impacting your repayment capacity and so your ability to expedite debt repayments.
In conclusion, your total debt amount, your monthly income, your repayment plan terms, interest rates, changes in your financial situation, and economic conditions all influence your ability to expedite the debt counselling process.
True North Debt’s negotiation expertise and experience in the industry can help you repay your debt as quickly as possible and become financially fit. If you would like lower interest rates on your debt, protection from asset seizure and litigation, and reduced debt repayments, contact True North Debt. We would love to help you on your way to living debt-free.