11 Sep The Debt Help System in South Africa

Are you facing a tough time with debt in South Africa? Don’t worry; many people feel the same. Fortunately, the South African debt help system, also called debt review, can be your lifeline. It’s like a financial rescue plan for people dealing with too much debt. Ultimately, debt review helps you regain control of your finances. Since we want to help you overcome your financial struggles, we’ve put together this article to help you learn all about the process, timeline, and fees involved in the debt review system. Let’s get right into it!

Process of the South African Debt Review System

The South African debt help system is made up of 7 key steps. Let’s take a look at each one below:

Step 1: Find a Registered Debt Counsellor

Finding a registered debt counsellor is the first step of in the debt review system, as they will assess your financial situation and create a payment plan for you. True North Debt is a great option for people looking for a debt counsellor, as we are registered with the National Credit Regulator (NCR) and have over 10 years of experience in helping people get out of debt. Ultimately, having a good debt counsellor makes the debt review process better, as they will guide you through the legal steps, protect your assets from repossession, and help you achieve financial freedom.

Step 2: Complete a Debt Review Application

Completing a debt review application is the second step of the South African debt help system. This involves gathering financial information and formally applying for debt review. Once submitted, a debt counsellor assesses your application’s viability and initiates the formal debt review process if eligible. This kickstarts the journey of helping you manage your debts legally.

Step 3: Debt Counsellor Assesses Your Financial Situation

After completing the debt review application, your debt counsellor will meticulously examine your financial condition, including income, expenses, and outstanding debts. This thorough assessment helps us create a comprehensive overview of your financial standing, ensuring we can devise an effective debt repayment plan.

Step 4: Debt Counsellor Negotiate with Your Creditors

Armed with a clear understanding of your finances, we then initiate negotiations with your creditors on your behalf. During these negotiations, our aim is to secure more favourable terms, such as reduced interest rates and extended repayment periods. This is all in an effort to make it easier for you to settle your debts.

Step 5: Debt Review Order is Issued

Once negotiations are successful, a debt review order is obtained from the National Credit Regulator (NCR). This legal document confirms that you are undergoing debt review and provides legal protection against creditor actions like repossessions or legal proceedings.

Step 6: Make monthly Payments to Your Debt Counsellor

This is one of the most important steps of the debt help system in South Africa. Under the debt review plan, you will begin making monthly payments to your debt counsellor. We will act as an intermediary, distributing these payments among your creditors according to the negotiated terms. This ensures that each creditor receives their share promptly.

Step 7: Debts Repaid Over Time

Over time, as you consistently make payments, your debts will gradually be repaid. This is arguably the best step of the debt review system! The debt review process typically spans several years, and as each debt is settled, your financial burden diminishes, eventually leading to full debt freedom and improved financial stability!

Fees Involved in the Debt Review System

Now that you’re more familiar with the debt review system, you are probably optimistic and ready to start this journey to your financial freedom. However, one question still taunts you: “How much does all of this cost?”. Well, fortunately, the debt review process does not cost an arm and a leg! This is because the fees for debt review are regulated by the NCR.

Although every debt counsellor may charge different fees based on their experience, the costs for a debt review are typically made up of three fees. First, there’s a fixed fee when you apply for the review. Then, there’s a one-time fixed administration fee. Lastly, there are ongoing administration and aftercare fees, which usually add up to 5% of your monthly payment, but not exceeding R450.

It’s important to note that several factors influence the cost of a debt review in South Africa. Firstly, your total debt amount plays a significant role, as more debt requires greater negotiation efforts from the debt counsellor, increasing costs. Secondly, the complexity of your case and longer review durations also contribute to expenses. Lastly, if a court application is necessary to enforce the repayment plan, it can further raise the overall cost.

The Debt Help System’s Timeline

The duration of the debt help system, specifically the debt review process, typically lasts between 2 to 5 years. This timeline is not fixed and depends on two primary factors: the amount of debt you owe and your ability to keep up with your monthly payments. If you owe a lot or miss payments, it might take longer. But if your debt isn’t too big and you pay on time, you could finish the process faster and get your finances back on track.

Explore the South African Debt Review System Now

If you’re grappling with debt in South Africa, now you know that you’re not alone. Take charge of your financial future today by exploring the South African debt review system. Like a financial rescue plan, the debt help system can help you regain control of your finances. Best of all, True North Debt covers each step and empowers you to embark on the path to financial freedom. So, contact us today and let’s start this journey together!