How Long Does Debt Review Last

Debt review, also known as debt counselling, is a formal process whereby a debt counsellor helps a person in debt to get back on track financially. It is a legal process that is regulated by the National Credit Regulator (NCR) in South Africa. The aim of this process is to help people who are struggling to make monthly debt repayments, by restructuring their debts and reducing their monthly payments. In this article, we will be discussing how long debt review lasts and what factors determine its duration.

📝 Index
  1. The Duration of Debt Review
    1. Phase One: Application and Assessment
    2. Phase Two: Restructuring and Payment Plan
  2. Factors That Determine the Duration of Debt Review

The Duration of Debt Review

The duration of debt review varies depending on the individual’s unique situation. It can typically last between 24 to 60 months, but it can take longer if the person’s debts are particularly high or if their creditors are not willing to cooperate. The debt review process can be divided into two phases:

Phase One: Application and Assessment

This phase starts with the applicant approaching a registered debt counsellor for assistance. The counsellor will then assess the applicant’s financial situation and determine if they are indeed over-indebted. If the applicant qualifies for debt review, the counsellor will then notify all the creditors and credit bureaus of the applicant’s application. Creditors are given 30 business days to confirm the outstanding debt and to provide a certificate of balance. Once all the necessary documentation has been received, the debt counsellor will determinate the repayment plan and make all the necessary arrangements with the creditors.

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Phase Two: Restructuring and Payment Plan

Once the debt review process has been initiated, the applicant will start making payments to a Payment Distribution Agency (PDA) who will channel the payments to the creditors. During this phase, the applicant is required to make monthly payments according to the agreed repayment plan. If the applicant is able to make payments as agreed, the debt review process will be completed once all the debts have been paid off. However, if the applicant is unable to make payments as agreed and defaults on the repayment plan, the creditor can terminate the debt review process and demand full payment of the outstanding amount.

Factors That Determine the Duration of Debt Review

The duration of the debt review process may depend on various factors, some of which include:

  • The total amount of debt that needs to be repaid
  • The applicant’s monthly income
  • The applicant’s monthly expenses
  • The number of creditors involved in the process
  • The willingness of creditors to cooperate

In conclusion, debt review can last between 24 to 60 months depending on the individual’s unique situation. It is a legal process that is designed to help people who are struggling with debt to regain financial stability. It is important to work with a registered debt counsellor who can guide you through the process and help you to make the best decisions for your financial future.

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