Do you Qualify for Debt Review?

For many South Africans, debt is more than a financial burden. It’s an emotional one as well. Owing substantial amounts can eat up a large chunk of your monthly salary.  Being over-indebted often forces you to cut back on essentials like groceries, fuel for your car, or the simple pleasures your children wish for, because you simply cannot afford them.

There is a solution that can offer immediate relief, a highly regulated process called debt review.

Debt review is a process designed to assist South Africans struggling with debt. 

The process ensures that you can manage your repayments in a way that suits your financial situation. Debt Review not only provides a structured repayment plan but also ensures that all your living expenses are adequately covered, allowing you to breathe easier knowing your basic needs are secured. 

Under a debt review, you are protected from all legal actions initiated by creditors. This means no more harassing calls, no threat of repossession, and no legal summons over your head. The fear and anxiety that accompany such threats can be crippling, but with debt review, these are immediately lifted. You are given a chance to reset your financial path without the looming dread of legal repercussions.

How do you qualify for Debt Review? 

Employment and Income Requirements

To qualify for debt review, it is essential that you have a reliable source of income. This can include employment wages, spousal or family support, earnings from self-employment, or even retrenchment benefits. The objective is to ensure that there is a steady income stream that can support your reduced monthly repayment after covering all living expenses.

Marital Considerations

Married in Community of Property:

• If you are married in community of property, both spouses must jointly participate in the debt review process. This inclusion is mandatory, as the financial dealings affect both parties equally.

Unmarried or Married Out of Community of Property:

• For those who are unmarried or married out of community of property but share joint assets like a home, it is highly recommended that both partners engage in the debt review process. If only one partner partakes, certain debts, such as a home loan, may not be included in the debt review. This exclusion could mean missing out on potential benefits like locked interest rates and instalments on those specific debts.

Financial Viability

For a successful application, your total living expenses must not exceed your income. There must be a sufficient balance of income remaining after covering living expenses to meet the newly negotiated repayment plan. This ensures that the payment plan is sustainable and lasts no longer than 3 -5 years before the individual can exit the process debt free.

Banking Requirements

Applicants must possess a valid South African bank account where their salary is deposited. Bank statements or a salary payslip are typically required as part of the application process to verify income and to outline personal expenses, which helps in crafting an affordable repayment plan.

Benefits of Entering Debt Review

When under debt review, a debt counsellor restructures your debt into a single consolidated repayment plan, often with reduced payments and interest rates. This setup not only makes repayments more manageable but also protects you from legal action by creditors, as long as you adhere to the agreed plan.

The process also helps to ensure that while you are paying off your debts and your essential living costs are covered.

Debt review can be a lifeline if you find yourself trapped in a cycle of debt. It’s a proactive step towards financial health, ensuring you get the support and legal protection needed to tackle your debts head-on. If you’re considering this option, ensure you work with a reputable and registered debt counsellor to guide you through the process efficiently.

For anyone facing the daunting challenge of significant debt, embracing the debt review process can be a decisive step towards recovery and financial stability.

Are you struggling with debt while earning an income? Do you owe more than R35K in total to creditors? If so, let our expert counsellors provide a no-obligation, cost-free assessment to consolidate and reduce your monthly repayments for immediate financial relief.

Contact us to speak with our expert counsellors and start your journey toward financial freedom.