15 Jul What to Do If I’m Overindebted
You can’t afford to make minimum payments to meet living expenses or just have a mountain of debt you don’t know what to do with. What now? It’s time to take action. Using a process known as debt review, you can reduce interest rates and repayments, stop those incessant calls from creditors, and sleep well once more.
To this end, let’s examine how you can take advantage of the benefits of debt review, how it works, and how your life will look during the process. Applying and starting the process is painless when you collaborate with Rynier Bernado, True North Debt’s resident debt counsellor. Debt help is here, make use of it.
How Does Debt Review Work?
The debt review process is easy enough to follow. To begin, you’ll fill out a Form 16, where you and your debt counsellor will list your sources of income, debts, and expenses. This grants us insights into how we can restructure your debt in such a way that you can afford to meet living expenses and pay your creditors back. Next, we issue your creditors a COB (certificate of balance) that notifies lenders that you have applied for debt review. This is also entered into the debt help system.
Assesment
As soon as that’s sorted, your debt counsellor will assess the comprehensive list of expenses and incomes to ascertain whether you’re over-indebted. If you are, you will be issued a Form 17.2 and attorney liaison will begin. Using an attorney is important because they appear in the Magistrate’s court on your behalf.
Furthermore, you’ll need to agree on attorney fees with the attorney before starting the process. Then, your creditors are informed that you have been confirmed to be overindebted after your Form 17.2 is filed.
If You’re Over-Indebted
If you are found to not be overindebted, you will be issued a Form 17.1. Note that the establishment of overindebtedness is completely at the discretion of the debt counsellor. They might also assess for reckless lending and incidental debt.
Then, the debt counsellor must record the proposal for debt rearrangement and initiate negotiations with creditors. The good thing is that creditors are lawfully obligated to accept negotiation attempts from debt counsellors.
Afterwards, it’s time to book a court date. Your attorney will appear in your capacity (on your behalf) and argue your overindebtedness, then confirm agreements with creditors. Now, you are legally obligated to make your payments as agreed with the lenders.
Consequently, you’ll make monthly payments to a PDA (payment distribution agency), which will distribute payments to creditors.
The debt review process could last from 3 to 5 years, depending on your repayment capacity.
After everyone is fully paid back, your debt counsellor will issue you a debt clearance certificate that you can use to remove the debt review flag from your credit profile. When you’ve built up your credit, you’ll be able to take out finance again.
Why Opt for Debt Counselling?
Debt review has many long-term benefits, including reduced interest and repayments, your very own financial advisor, protection from legal action, and the emotional toll of debt. Consequently, you’ll be able to pay off your debt more quickly, therefore gaining access to credit sooner. You’ll learn how to lower your spending and stay financially fit, too. You’ll also learn about your rights under debt review.
If you would like to enjoy all these benefits and more, contact us today. Let’s get you back in control of your money. As soon as you apply, you are immune against legal action. Try our repayment calculator to see how much you could save with debt counselling.