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What Debt Review is and What it is Not

by | Mar 14, 2023

What Debt Review

What Debt Review is:

Debt Review Meaning

Debt review is a legal process in South Africa that is designed to assist individuals who are struggling with debt. It is a formal process that aims to help individuals manage their debt by restructuring their repayments in a way that is more affordable for them. Debt review is initiated by a debt counsellor who assesses an individual’s financial situation, negotiates with creditors on their behalf, and creates a debt repayment plan that is tailored to their needs. Once the plan is in place, the individual makes one monthly payment to a payment distribution agency, which then distributes the funds to the creditors. Debt review is a useful tool for individuals who are overwhelmed by debt and struggling to keep up with their payments. It can provide them with the breathing room they need to get back on their feet and regain control of their finances.

Debt Review South Africa

Debt review is a process where a consumer can seek assistance from a debt counsellor to manage their outstanding debt. It is a regulated process governed by the National Credit Act (NCA) and is designed to help consumers who are struggling with their debt repayments. Debt review is not the same as debt consolidation, which involves taking out a new loan to pay off multiple debts.

The process of debt review involves a debt counsellor assessing the consumer’s financial situation, including their income, expenses, and debts. The debt counsellor will then negotiate with the consumer’s creditors to restructure their debts into more affordable repayments. The consumer will then make one monthly payment to a payment distribution agency, who will distribute the funds to the creditors according to the restructured payment plan.

What Debt Review

Debt review advantages and disadvantages:

Pros of Debt Review:

  1. Affordable Repayments: One of the main advantages of debt review is that it can make debt repayments more affordable. By negotiating with creditors, the debt counsellor can restructure the debt to ensure that the consumer can afford to make their repayments.
  2. Legal Protection: Debt review offers legal protection to consumers. While under debt review, the consumer is protected from legal action by their creditors, including repossession of their assets.
  3. Consolidated Payment: Debt review also simplifies debt repayment by consolidating multiple debt payments into one affordable payment. This makes it easier for the consumer to manage their finances and reduces the risk of missed payments.

Cons of Debt Review:

  1. Lengthy Process: Debt review is a lengthy process that can take several months to complete. During this time, the consumer may not be able to access credit, which can be challenging.
  2. Negative Credit Record: Debt review will have a negative impact on the consumer’s credit record. This may affect their ability to access credit in the future, even after completing the debt review process.
  3. Limited Options: Debt review is not suitable for everyone. If the consumer’s financial situation is too severe, they may not be able to enter into debt review, and other options may need to be explored.

The Negative Debt Cycle Created by Debt Review:

Is debt review a good idea? While debt review can be beneficial for consumers who are struggling with debt, it can also create a negative debt cycle. This is because debt review does not address the underlying causes of the debt, such as overspending or poor financial management. As a result, once the consumer completes the debt review process, they may find themselves back in debt if they do not address these underlying issues.

Another issue with debt review is that it can lead to a culture of dependency. Some consumers may become reliant on debt review and use it as a way to manage their debt without addressing the root causes. This can lead to a cycle of repeated debt review applications, which can further harm the consumer’s credit record and financial stability.

In conclusion, debt review can be a useful tool for consumers who are struggling with debt. However, it is essential to understand that debt review is not a quick fix for financial problems.

It is a regulated process that requires commitment and effort from the consumer to successfully complete. While debt review can offer legal protection, affordable repayments, and consolidated payments, it can also have negative impacts on credit records and create a negative debt cycle. Therefore, it is important to consider all options carefully and seek professional advice before entering into debt review.

a Better Debt Solution

Unlike debt review, which can have a negative impact on your credit score and create a cycle of debt, Real Estate Assist offers lasting results by using your property equity to settle your debts and negotiating with third parties for the best solution. Here are some of the advantages of using Real Estate Assist:

  1. Keep your home and avoid foreclosure If you are facing foreclosure, Real Estate Assist can help you stop legal action and sale in execution. Sale in execution is not the ideal solution to liquidate an asset to recover the debt and protect the proceeds and investment made in your property. Real Estate Assist can provide real estate assistance through advice, guidance, collaboration, and cooperation with creditors and industry professionals to provide solutions to address your challenges. The earlier you work with Real Estate Assist in this process, the less costly it will be. They will help you stay in your home and rebuild your credit.
  2. Consolidate debt and improve your credit score Real Estate Assist helps you recover from short-term debt without debt review and helps you build financial courage to shorten the delay in your financial recovery. Turn your credit score around without further delay and increase your cash flow through their financial courage program.
  3. Unlock cash or equity from your property Your greatest asset is your real estate, and if your credit is impaired, there will be very few who can assist. By taking advantage of Real Estate Assist’s program, you can unlock your equity from your property to address urgent needs, settle debts, or have immediate cash flow. They have helped countless people in debt get back on their feet as well as assisted property owners to free up cash flow to inject into their business and address unforeseen expenses due to trauma and more.
  4. Acceptable industry approaches Real Estate Assist provides sustainable and bankable solutions that prevent being taken advantage of while providing protection and a win-win for all participants. They facilitate the process for you to keep your home or real estate while recovering, unlock equity from your real estate to address financial needs, and assist you in maximizing your proceeds from the sale of your home or real estate.
  5. Non-qualifying prospective home buyers Real Estate Assist can also help non-qualifying prospective home buyers move into homeownership by offering structured real estate solutions not available in the market. They provide clarity prior to transacting after assessment with regards to the options, costs, exit strategy, and final outcome.

Debt review Removal in South Africa

Debt Review Removal

Debt Review Loans

Taking out a debt review loan may seem like a quick fix to your financial woes, but it is important to understand that it does not address the root cause of the problem – overspending and poor financial management. In fact, taking out a debt review loan can actually make your financial situation worse by adding more debt to your already existing debt. This is because debt review loans often come with high interest rates and fees, which can make it difficult to pay off your debt in the long run. Instead of taking out a debt review loan, consider using Real Estate Assist services to be debt-free in South Africa and have lasting results. By unlocking the equity in your home, Real Estate Assist can provide you with the necessary funds to settle your debts without the added burden of high-interest rates and fees. This will help you break the negative debt cycle and give you the financial freedom you need to move forward. With Real Estate Assist, you can achieve lasting results and a brighter financial future.

Can Debt Review Be cancelled?

Yes, it is possible to cancel debt review in South Africa. Debt review can be cancelled if you have paid off all your debts or if your financial situation has improved significantly. However, the process of cancelling debt review can be lengthy and complicated, and it can negatively impact your credit score. This is where Real Estate Assist comes in. Real Estate Assist can assist in removing you from debt review and providing you with a more sustainable and lasting solution. By unlocking the equity in your home, Real Estate Assist can help settle your debts and provide you with the financial freedom you need to move forward. With Real Estate Assist, you can get out of debt review and begin rebuilding your credit score, all while keeping your home and assets safe.

Does Debt Review Affect Your Employment

Debt review itself does not directly affect employment in South Africa. However, it is important to note that employers may perform credit checks on potential employees as part of the hiring process. If an individual is under debt review, it may show up on their credit report and potentially impact their chances of being hired. In addition, if an individual’s financial situation is causing them significant stress or anxiety, it may affect their job performance and ability to focus on work. It is important for individuals under debt review to prioritize their financial health and seek support from a debt counsellor or financial advisor to help them manage their debt and improve their overall financial situation.

Debt Review Alternative

In conclusion, if you are struggling with debt and at risk of losing your home, Real Estate Assist can offer you a unique solution to keep your home, consolidate your debt, improve your credit score, and unlock cash from your property. Unlike debt review, which can create a negative debt cycle, Real Estate Assist offers lasting results using property equity to settle debt and negotiating with third parties for the best solution. Take control of your finances and explore the options available to you with Real Estate Assist.

Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal or property advice. We do not take responsibility for any actions taken based on the information provided in this blog. It is always recommended to seek professional advice for your specific legal or property needs. Contact us (Real Estate Assist) if you seek such advice and we will appoint a professional from our team to be of assistance.

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Please Note: We are unable to provide assistance if you do not own a property. Real Estate Assist specializes in helping property owners who are experiencing challenges with their mortgage payments. If you own a property and require support with debt consolidation without going through the debt review process, our team is here to help you explore options to unlock the equity in your home for necessary family matters.

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