Question. ‘Please tell me more about Debt Review and how do I exit Debt Review?’

Available to an over-indebted consumer, debt review is a 3-5 year solution where a Public Distribution Agency (PDA) distributes funds to your creditors on a monthly basis after a Debt Counsellor has renegotiated and arranged an alternative repayment plan for you. Your credit profile will reflect this process, meaning that you will be flagged and therefore no longer be able to enter into further credit agreements during the debt review period.

Two ways in which one may exit the debt review process:

1. Where all your debt has been paid up. In this instance paid up letters may be obtained and sent to the Debt Counsellor in order for him/ her to assist in removing the debt review flag from your name/ credit profile;

2. You may apply to Court for a rescission order. This is, however, only possible where you can prove that your financial circumstances have changed and that you are financially capable of paying and settling your debts by yourself, in other words that you are no longer over-indebted.

Debt review was made available by the National Credit Act and is a far better solution than being placed under Administration. With Administration there is plenty of room for error/ fraud in that the Administrator and the fees charged by the Administrator are not as strictly regulated as is currently the case with debt review and Debt Counsellors. One example is that, with administration, the Administrator is responsible for managing and distributing payments to creditors. In terms of debt review, a system (PDA) distributes the payments once the Debt Counsellor has done his/ her work. After that, the Debt Counsellor is responsible for maintenance and for answering any questions or queries you may have. Should you be unhappy with the services provided by a Debt Counsellor, one may ask the National Credit Regulator (NCR) for assistance. For a link of all registered Debt Counsellors you may visit: http://www.ncr.org.za/register_of_registrants/registered_dc.php

Please contact Legal Hero or complete the ‘contact me’ form on our website http://legalhero.co.za/debt-hero/ and tick ‘Debt Hero’ for further assistance. Kindly remember to include your membership number or ID number.