Debt Review is one of the fundamental rights you have as a consumer, and on this World Consumer Rights Day, it is a privilege for DebtSafe to raise awareness concerning your consumer rights. Apart from the right to apply for credit and certain other rights related to you under the National Credit Act (also known as “the Act” or NCA), you have the right to reclaim control of your finances if you are over-indebted.
“An educated consumer is a protected consumer. I want to encourage you to get familiar with the Act, know what the National Credit Regulator's (NCR’s) role entails, and understand what the Debt Review/Counselling process involves so that you can make an informed decision when over-indebted,” highlights Carla Oberholzer, spokesperson and debt advisor at DebtSafe.
The National Credit Act (NCA)
The Act (promulgated in 2007) aims to provide improved consumer information standards and attempts to promote a non-discriminatory platform for consumer credit while ensuring the process is regulated.
The National Credit Regulator (NCR)
The NCR was established by Act No. 34 of 2005 and serves as the “credit industry watchdog” of South Africa. The NCR requires credit bureaus, credit providers, and debt counsellors, among others, to comply with the Act.
Debt Review explained
The Debt Review process is a legal solution via the Act to help you, the over-indebted consumer. NOTE: Debt Review is NOT a payment holiday, quick fix, OR a consolidation loan (meaning extra debt, as you cannot take on credit while under the process).
Consider Debt Review if you:
- Receive a consistent monthly income amount.
- Have been denied new credit by various credit providers.
- Have a grievous-looking credit profile.
- Have defaulted on your debt payments.
- Receive constant ‘repossession’ threats concerning your assets (house/ vehicle).
- Service your debt obligations with money allocated to your living costs.
- Are experiencing severe debt stress.
How Debt Review works (in a nutshell):
If you experience over-indebtedness, you have the right to get into contact with a registered Debt Review firm or Debt Counsellor. DebtSafe’s registered Debt Counsellors for example, will explain the process in full and do a FREE debt assessment to see if you qualify for Debt Review and are over-indebted.
If you consider Debt Review as THE solution for you, you will receive legal protection after applying, and your debts will be consolidated into an interim repayment plan. You will immediately feel the relief as your cash flow opens up. Once your registered Debt Counsellor's negotiations with your creditors conclude (to lower your installments), you will receive a new, reduced, monthly repayment plan via a court order.
The NCA requires that an accredited Payment Distribution Agency (PDA) – note NOT a Debt Counsellor – distributes your money to your various creditors.
And since your court order is legally binding, you have to fully commit to your repayment plan so that your creditors will not begin legal action against you. DebtSafe knows that life can change in an instant while under Debt Review and, therefore, also offers additional life insurance cover options (that you can incorporate into your plan).
Diligently sticking to your payment plan will help you receive your Clearance Certificate/Form 19 needed as proof (from the NCR) that your debts have been paid off. And, you can then slowly build your all-clear credit record again.
World Consumer Rights Day is an essential reminder for you to exercise your various consumer rights actively, and specifically, to consider Debt Review as a viable solution to help fix your debt situation.
You have the right to apply for Debt Review – a regulated process that can help you reclaim financial freedom.