Nobody saw the Coronavirus coming, and hopefully in a few months from now we might be able to start living a normal life again. Business is going to take a big knock, but hopefully the banks and insurance companies are going to give South Africans some reprieve.

It’s not a great time to be over-indebted, especially with a global recession looming large.

What are your options if you are over-indebted?

As we’ve mentioned in a previous post, written in December 2019, South Africans have 3 options available to them if they are feeling consumed by debt.

One of the options is to apply for Debt Review.

Drowning in debt is a very scary thing, and it’s unfortunately becoming a harsh reality for many South Africans  The good news, though, is that there is a way to get yourself out of debt through the Debt Review process – it could be the perfect solution help you get back into a healthy financial position again, once the imposed shutdown is over.

Let us take you through the various steps in the Debt Review process:

Step 1 – Work out if you are real candidate for Debt Review?

First things first, you need to find out if you qualify for the Debt Review process by using an online Debt Review calculator, and work out if you are legally over-indebted. Find one here. You need to punch in your income and expenses (from all your salary deductions, to the cost of your rent/bond repayment, your insurance and medical aid, what you spend on food, what your kids schooling costs and what debt repayments you have)  to work out if you can or cannot meet all your financial commitments at the end of each month.

Step 2 – Contact a Debt Review company

If the calculations indicate that you probably do qualify for the Debt Review process, you can then get it touch with a Debt Review company of your choice. They will verify all your information over the phone, answer any questions you have and double check that you are over-indebted. They will then run you through the paperwork they need you to sign and explain the next steps in the process.

Step 3 – The Debt Review company will notify credit providers & credit bureaus

If you qualify for Debt Review and accept the terms and conditions of being under the Debt Review process, the Debt Review company will request info on your current credit obligations from the credit bureaus. They will then start the process of notifying the credit bureaus and your credit providers that you are under Debt Review and request info on all your outstanding balances that you owe them.

Step 4 – The Debt Review company will draft a debt restructuring plan for you

The Debt Review company will then start drafting up a debt restructuring proposal and a new payment plan for your credit providers. Their aim is to get you into a favourable long-term repayment plan, that you can stick to, based on your affordability.

Step 5 – The Debt Review company will finalize your application with the Magistrate’s Court

Your Debt Review application will be sent through to the Magistrate’s court and the Debt Review company will then move your application into an official court order. This means the process is finalized.

Step 6 – Debt Review Process

You will now be in the Debt Review process and it is up to you to stick to the conditions in order to remain in the process until all your debt is completely settled.

Until next time.

The MoneyShop Team