If you are drowning in debt and your financial situation seems to be spiraling out of control, going through debt review can be a helpful way to manage your unsecured debts. However, once you have completed your debt review process and paid off your debts, you may wonder how to get rid of your debt review status. In this article, we'll take you through the steps you can take to remove your debt review status and regain financial freedom.
Understanding Debt Review
Before we dive into how to remove debt review status, let's first understanding what debt review is.
Debt review is a debt relief program designed to help individuals who are unable to meet their financial obligations by restructuring their debts and helping them pay it off over a period of time. This process is governed in South Africa by the National Credit Regulator.
The process involves:
- Having a professional debt counsellor assess your income and expenses to determine what debt you can afford to pay back.
- Helping you to come up with a debt repayment plan that is affordable and sustainable.
- Restructuring your debts by negotiating new payment terms and lower interest rates with your creditors.
- Consolidating your debt into one monthly payment which goes to a payment distribution agency who then pays your creditors according to the new payment terms.
How to Remove Debt Review Status
Step 1: Request a Settlement Certificate from your Payment Distribution Agency (PDA)
Your PDA is responsible for managing your payments during your debt review process. Once you have paid off your debts in full, you can request a settlement certificate from them. This document shows that you have fulfilled the terms of your repayment plan.
Step 2: Send the Settlement Certificate to your Debt Counsellor
Once you receive your settlement certificate, you need to send it to your debt counsellor. Your debt counsellor will then issue a clearance certificate which shows that you have paid off all your debts and fulfilled the terms of your debt review.
Step 3: Submit the Clearance Certificate to the Credit Bureau
The next step is to submit the clearance certificate to the credit bureau. The credit bureau will then remove your debt review status from your credit profile.
Benefits of Removing Debt Review Status
Improves your Credit Score: Once your debt review status has been removed from your credit profile, your credit score will improve. This can help you access credit in the future at lower interest rates.
Ability to Apply for Credit: Some lenders may not be willing to lend to you while you are under debt review. Once your debt review status has been removed, you can apply for credit with any lender of your choice.
Regain financial freedom: Once you have paid off your debts, removed your debt review status, and improved your credit score, you will have regained financial freedom. You can now focus on building your savings, investing, and achieving your financial goals.
Conclusion
Debt review can be a helpful way to manage your debts, but it is important to work towards removing your debt review status once you have paid off your debts. With these steps, you can remove your debt review status and regain control of your finances.
