What You Need to Know About Debt Review

Debt review is a method designed to assist consumers who are struggling to manage their debts. It is a formal and closely monitored process, intended to provide relief to individuals who find themselves in over their heads when it comes to debt obligations.

Here are some key points to consider about debt review:

1. Eligibility: Not everyone is eligible for debt review. Typically, individuals who are struggling with multiple debts that they are unable to pay may qualify for debt review. However, it’s important to note that certain debts, such as secured loans, are not included in the debt review process.

2. Protection from Creditors: One of the primary benefits of debt review is that it provides protection from creditors. Once the debt review process begins, creditors are legally prohibited from taking further action against the debtor, such as repossessing assets or taking legal action.

3. Debt Counsellor: In order to undergo debt review, individuals must work with a registered debt counsellor. The debt counsellor will assess the individual's financial situation and work with creditors to restructure the debt repayment plan.

4. Payment Plan: During the debt review process, a revised payment plan will be proposed to creditors. This plan takes into account the individual's financial circumstances, and aims to make debt repayment more manageable.

5. Credit Record: While under debt review, individuals will have a flag on their credit record indicating that they are undergoing the process. This flag will remain until all debts under review have been settled. This may impact the individual's ability to access further credit during this time.

6. Completion and Rehabilitation: Once all debts included in the debt review have been settled, the individual will receive a clearance certificate, indicating that they have successfully completed the process. Their credit record will be updated accordingly.

It’s important to note that debt review is a serious financial decision and should be carefully considered. While it can provide much-needed relief to individuals struggling with debt, it is not a quick or easy fix. Individuals considering debt review should seek advice from a qualified financial professional to fully understand the implications and requirements of the process.

​​If you have any questions about debt you currently have, please feel free to reach out to a member of the Libertine Consultants team. We are here to provide you with judgement-free support and advice. 

Need advice? We can assist with that too! Submit your inquiry to us via email advisors@libertineconsultants.co.za and we will provide you with sound insights on the best way forward. In the meantime, keep an eye on our YouTube channel to get more practical advice on managing the financial stress of the pandemic.