Over-Indebted? Settle the Debt with Us

Are you struggling to pay your debts because your repayments are too high or can’t pay for essential expenses because of your repayments? If this sounds familiar, you may be over-indebted. Being over-indebted means your debts could exceed your income or take up a fair portion of it, leaving you with little to no budgetary breathing room.

An S129 letter – letter of collections or default – also indicates that you’re likely over-indebted. So, what are your options?

You could:

• Sell assets to pay off the debt, which could leave you without transport in the case of a car.
• File for bankruptcy and have your assets repossessed with a 10-year mark on your credit report.
• Try to negotiate interest rates and repayments yourself with creditors, which is unlikely to work.
• Undergo debt review, where lenders are legally required to reduce your interest rates and repayments.

Out of the four, debt review is the best option. You’ll retain your assets, be debt-free after the process, have legal protection, and access reduced repayments and interest rates.

Settle the Debt with Debt Review

Debt review is a legal process wherein a debt counsellor negotiates with creditors on your behalf for reduced repayments and interest rates. Once your creditors have been notified that your debt has begun to be restructured, you’re immune from any impending legal action. No one can seize your assets, take you to court, or garnish your wages.

How Debt Review Works

First, you fill in a Form 16. This is where you’ll list all your debts, assets, income sources, and expenses, allowing your debt counsellor to have a clear picture of your financial circumstances. Using Form 16, they’ll determine whether you’re over-indebted.

If you are, they’ll issue your creditors Form 17.2, which notifies them you’re under debt review. After this form has been issued, you’re no longer at risk of legal action unless a creditor has already taken action against you and you have a court summons, one of your rights under debt review.

Your debt counsellor will propose how your creditors might restructure your repayments and interest rates to free you of over-indebtedness. If they’re unhappy with the proposal, your debt counsellor will negotiate until everyone is satisfied with the proposal. Then, an attorney will submit the plan to the Magistrate’s Court. If the judge gives the go-ahead, you’ll start making monthly repayments through a PDA (payment distribution agency), which will fairly distribute your payments to creditors.

After three to five years of repayments, you’ll be debt-free (except for long-term debts, like a mortgage). Your debt counsellor will provide you with a clearance certificate, Form 19, which you can submit to the bureaus to have the debt review flag and the payments that led to it expunged from your credit profile. You’ll then be able to start rebuilding your credit responsibly — one of the many benefits of debt counselling.

Settle the Debt with True North Debt

True North Debt’s team of debt review experts and debt counsellors would be glad to assist you on your journey to financial freedom. We’ll negotiate reduced interest rates and lower repayments on your behalf, ensure you have legal protection, and keep your assets safe. To find out more, contact us today.