The Debt Review South Africa Process

The implementation of the 2007 National Credit Act in South Africa paved the way for individuals living in the country struggling with credit problems. The NCA has had a profound effect on many role players in the credit industry, how credit or loans may be obtained, how consumers are protected from mindless loaning including the practical application of solutions to address the growing statistics of people buried in debts.

The NCA provides shelter for individuals seeking assistance to manage their unpaid debts. Through this government act, an individual can avail of remedies to his or her over-indebtedness and make rearrangements for payment obligations to be bearable.

The Debt Review Process

Below is a description of debt review by the Debt Counsellors Association of South Africa:

Debt review is a remedy that has been created by the NCA in terms of section 86 where the consumer can be declared over-indebted and have his or her debt obligations re-arranged. The debt counsellor will review the consumer’s budget and can make proposals to the relevant credit providers which the credit providers can either accept or reject. In the event of the credit providers rejecting the proposals the debt counsellor must refer the matter to the Magistrates’ Court for adjudication to make an order on the acceptability of the proposal set out in terms of the referral.

In terms of the pre-amble and section 3 of the National Credit Act (NCA) the objective of consumer protection is specifically mentioned and, as set out in section 86 , the intention is to:

1. Provide the consumer with protection;

2. Provide the consumer with a second chance to stay part of the economy without having     to go down the avenue of litigation, judgments and execution sales.

To put it simply, undergoing the debt review process allows you to still function as a consumer with basic needs to satisfy. Note that when signed up for debt review, a debt counselor reviews your budget and make proposals to your creditor/s. This step allows you to have a breathing space for which to have ample money left every month to spend for your needs and pay off your debts.

Bear in mind, however, that this proposal is subject to creditors’ acceptance or rejection. In other words, just because you are in debt review doesn’t mean relief is without negotiations. It cannot be stated enough that for the whole process to work, cooperation by both parties and constant communication are necessary.

The financial stress of the present times in addition to continuous calls from credit providers pushes a person heavily in debt to contact a debt counselor. In many cases the consumer has waited too long already. Either they have made other loans to pay off their existing one, thereby worsening the situation, or they have not taken in the seriousness of the problem right at the outset until it became full-blown and uncontrollable.

The earlier you seek help about your debts, the better. So go ahead and never let embarrassment, fear or doubts hinder you.