Get to know more about Debt Review
What is Debt Counselling?
Debt counselling also known as Debt Review is a legal process brought about by the implementation of the National Credit Act, where a Debt Counsellor duly registered with the National Credit Regulator performs an assessment of a consumer’s affairs to determine whether he/she is over indebted or not.
If the consumer is over indebted the debt counsellor declares the consumer over indebted and then puts together a proposal based on the client’s affordability to repay the debt in the quickest period possible while ensuring that he/she has made adequate provision for the monthly living expenses of the consumer.
The object is to settle debt and ensure the sustainability of the proposal moving forward so that the consumer pays what he/she can afford while servicing his/her debt within reasonable periods of time.
What is the difference between Debt Counselling and Debt Consolidation?
Debt review is a process whereby a debt counsellor assesses your outstanding debt and puts in place a restructured debt repayment plan. The debt counsellor will renegotiate interest rates and repayment terms with your credit providers to reduce them. The benefit of debt review is that it can protect your assets from being repossessed by the credit provider.
Debt consolidation is a loan for the sum of all (or some) of your unsecured loans, like personal loans, from various credit providers. If you consolidate your debt, you can settle your high- interest debts and close the accounts, leaving you with only one debt repayment per month to the credit provider who granted you the consolidation loan.
Pioneer Debt Solutions believes that taking out a new loan is not necessarily the best solution, as it often leads to your debt situation getting worse. Debt consolidation DOES NOT PROTECT YOU from your creditors harassing you or attaching your possessions. We ensure that you are protected legally, by converting your payment plan into a court order in your favour; thus, preventing your creditors from harassing you.
Do i have to come into your offices or go to court to apply for debt review?
NO, you do not need to come into our offices or go to court to apply for Debt Review. The Debt Review application process can be finalized by simply contacting Pioneer Debt Solutions and one of our Debt Counsellors will assist you through the process.
What happens when i go under debt review?
When you go under Debt Review all the credit bureaus and your credit providers will be notified that you are now under debt review. They then flag your profile as ‘under debt review’.
Once you have completed the process, i.e., your debt is completely paid off, you will be issued a clearance certificate.
Thereafter, we will notify the credit bureaus that you have settled your debt and have been issued with your clearance certificate!
Do i qualify for debt review?
If you feel that handling your debt is becoming a financial problem, we will help you. You just need to be over the age of 18 and have a regular source of income (salary, business income or a pension). Our friendly debt counsellors will explain the process to you, and guide you through, step by step.
Do I have too much debt?
You can never have too much debt if we are able to put together a suitable rearrangement proposal to your credit providers that allow you to service your outstanding debt but still be able to have money to meet all your living expenses.
How long does the debt review process last?
The time you spend under Debt Review is dependant on your outstanding balances and the repayment amount that is being paid towards your settling your debt. We aim to assist you with settling your debt in the quickest time possible.
What are the costs involved with debt review?
The purpose of Debt Review is to provide you with debt relief. As such, the debt review fees are dependent on your affordability and payment is accommodated for. These fees are collected in line with the National Credit Regulators Act which your credit providers are aware of. If you have any further questions around this, during your application process we will be able to provide you with assistance.
Can credit providers blacklist me while i am under debt review?
No, your credit providers cannot blacklist you by law when under Debt Review. However, if you were blacklisted before you applied for Debt Review, these negative listings will remain on your credit record. This is just another reason to apply for Debt Review as soon as you see that you are struggling with paying for your debt.
Remember, you will be flagged as being under Debt Review for that time period and once you have completed the process, notification will be sent out by Pioneer Debt Solutions to have that flagged removed from you profile.
Can i receive help with debt review if im unemployed?
Pioneer Debt Solutions would be able to assist you only if you have an alternate source of income that allows you to meet your debt repayment affordability. We would also require you to provide proof of this income as apart of your application process.
Will i qualify if i’ve been summoned to court or have judgments against me
You can still qualify for debt review for your accounts that you have not received a summons for or have a judgment against. Unfortunately, that account that have had summon issued against or judgments obtain we would not be able to assist with as they can not be placed under debt review. However, if there is a shortfall on the account this is something that we could possibly assist with.
Can I apply for credit or use my credit cards during debt review?
You will not be able to obtain credit or use your accounts while your profile is flagged. This is just so that you can pay off your debt effectively without the hindrance of more debt.
Can I cancel my debt review
Once you have been flagged under Debt Review, you will only be able to cancel the Debt Review with a court order or alternatively when you have been issued with a form 19 (Clearance Certificate).
What happens once debt review has been completed? Can I buy a house, car, etc
Once you have completed your Debt Review process, firstly and most importantly you are now debt free!
You will be issued with your clearance certificate and this will be sent out to the credit bureaus and credit provider to have the Debt Review flagged removed. Once this has been done and if you are able to afford the monthly instalments and your credit score is good you are able to re-enter into the “credit world”. So, YES you would be able to obtain credit again!
We are married in community of property does my partner need to apply for debt counselling
Yes, if you are married in community of property, both you and your partner have to apply for debt counselling and undergo the process as a couple or single entity. When married in this way, you are legally classified as one single joint estate. Because of this, all assets and debts are considered as joint or shared by both parties. You both remain responsible for the repayment of the debt and you will both remain under the debt review process.
What happens if all or some of my credit providers do not accept the debt repayment plan
When you apply for debt counselling with Pioneer Debt Solutions, one of the steps that our counsellors will follow is to have a revised debt repayment plan drawn up. This repayment plan will then be sent to your credit provider, in order to negotiate with them in regard to the instalment they will receive while you are under debt review.
However, the credit provider has the right to reject or counter the restructured debt repayment plans with reason. We would then try and meet what your credit providers want, this will be communicated to you. We would respond to them with an updated repayment plan for the credit provider to reassess.
If we are unable to reach an agreement with your credit provider, your matter is referred to court to be finalized. During this time, the Magistrate will look at the repayment plan, once this has been granted your credit provider will be notified in order for them to have your account restructured in line with the granted order that was obtain from court.
Why is debt review better than a debt consolidation loan
While both offer relief from debt, only one frees you from debt. Debt consolidation is when you take out one large loan to cover other outstanding loan amounts, thus combining all payments to separate creditors into one payment to one creditor. While this can seem to be great for relieving the stress of debt, and can lead to better repayment terms, it still leaves you with the full debt with interest, and no protection.
When going under debt review your credit accounts are halted, ensuring you do not continue to take out added debt on top of what you have. While under this process, a flag is placed on your credit record showing other creditors, making sure credit will not be granted and you can be protected. The protection in this regard goes a long way – clients undergoing debt review cannot be hounded by creditors or have legal action taken against them as long as these accounts have been flagged and payments are being made towards the accounts. So, while under debt review, your assets are safe and guarded by the law.