How Debt Review Can Help You Regain Financial Control
The debt review process is designed to help consumers struggling with debt by offering a structured way to manage their finances and gradually pay off what they owe.
A Debt Counsellor works on your behalf, negotiating with creditors to reduce your monthly payments and interest rates. These negotiations culminate in a court order, making the agreements legally binding for both you and your creditors.
By successfully completing the debt review process, you regain control over your finances and can access credit responsibly in the future.
Step 1: Initiating the Debt Review Process
The debt review process begins with an application, a formal legal procedure conducted primarily through documentation. Your Debt Counsellor will guide you through completing Form 16, which collects critical information like your personal details, budget, and a list of creditors. Along with this form, you’ll need to submit:
- A copy of your ID
- A power of attorney
- Bank statements
- A recent payslip
These documents are essential for assessing whether you’re eligible for debt review due to over-indebtedness.
Step 2: Notifying Creditors and Proposing a New Payment Plan
After submitting your application, your Debt Counsellor will notify all your creditors using Form 17.1. This form requests a Certificate of Balance from each creditor, which details the outstanding amounts you owe. With this information, your Debt Counsellor can assess your financial situation and draft a revised payment plan.
The next step involves sending Form 17.2 to all creditors, confirming whether your debt review application has been successful. If approved, a proposal outlining the revised payment terms is sent to your creditors. They can either accept these terms or negotiate further until an agreement is reached.
Step 3: Securing Court Approval
Your Debt Counsellor must lodge the debt review application with the court within 60 days. During this time, the National Credit Act protects you from any legal action by your creditors. If any disputes arise, they are resolved in court, where the Magistrate reviews the case and makes a final judgment. However, most cases are settled amicably before reaching this stage.
Once the court grants the order, a payment distribution agent will manage your payments, ensuring they are correctly distributed to all creditors according to the court-approved plan.
Conclusion: Completing the Debt Review Process
After fulfilling all the obligations under the debt review process, your Debt Counsellor will issue a clearance certificate, confirming that your debts have been fully paid off. This certificate is sent to your creditors, the credit bureau, and the National Credit Regulator, signaling the removal of any negative flags on your credit record.
By successfully completing the debt review process, you regain control over your finances and can access credit responsibly in the future. The process provides a vital lifeline for over-indebted consumers, offering a clear path to financial stability and freedom.
WHO ARE WE AT VHT
VHT Attorneys is a boutique law firm with a large vision. We provide innovative legal solutions with a renowned standard of integrity and confidentiality.
We help our clients:
- Remove Debt Review Status
- Commercial & Corporate Law
- Labour Law
- Dispute Resolution / Litigation
