What is excluded from debt review? (2024)

What is excluded from debt review?

A: All credit agreements must be included in your Debt Review. The only exception is those credit agreements where the creditor has started legal action. But even then, you will have to let your Debt Counsellor know about the agreement so that it can be taken into account in your overall monthly budget.

What is the red flag on debt review?

Consumers should be very wary of this. The only way you can exit the debt review process is if you have paid up all your debt. Anyone or company claiming they can help you leave the process before this, should be seen as a red flag. To cancel the debt review process, you need to be issued with a clearance certificate.

How do I hide my debt review?

You cannot remove yourself from debt review, but you can get a registered Debt Counsellor to do so. They will do this by issuing you with a debt review clearance certificate. However, you first need to meet one of the following criteria: All your debts have been paid up.

Will I lose my assets with debt review?

The fear of losing assets while under debt review is a genuine concern for people and prevents many from seeking debt counselling. However, the fear is unfounded as debt review protects your assets.

What is the disadvantage of debt review?

Disadvantages (and their impact): No access to new credit. During Debt Review, you cannot access new loans or credit cards. While this helps break the borrowing cycle, it can restrict your financial flexibility.

How long can a person stay under debt review?

The average time required to complete a debt review is three to five years or 36 – 60 months. Be that as it may, many people complete the process sooner. These are the factors that contribute to how long debt review lasts: The total amount of debt that you have.

Can you make debt after debt review?

Since credit bureaus will remove the 'under debt review' flag from the client's profile, one will be able to take out credit after the clearance certificate is issued. However there may be limits to the amount of credit that will be loaned initallty, until the credit score has been rebuilt.

How much does it cost to remove debt review?

Essential Service Fee: Starting from R1500

The essential service fee encompasses the removal of debt review from your credit record. Starting from R1500, this fee covers all the essential paperwork and processes involved.

Do you have a credit score if you are under debt review?

34 of 2005, an order for debt review given by the National Consumer Tribunal or the Court, the credit information must be retained by credit bureaus from the date of commencement of the event until a clearance certificate is issued. This implies that credit scoring is not possible for people under debt review.

What will my credit score be after debt review?

This has been put in place by the National Credit Act (NCA) to help consumers become debt-free. If you make more debt while you're under debt review, the process wouldn't work. When you've completed the debt review process and you've received your clearance certificate, your credit score will be set back to zero.

Do creditors watch your bank account?

You should be careful about what information you give creditors. Creditors need court orders to access your bank account. Without a legal order, your creditor most likely does not have the right to your bank information.

Can your name be removed from debt review?

As of March 2022, a consumer can no longer voluntarily withdraw from the debt review process—even prior to being declared over-indebted. What this means is that: as soon as you apply for debt review (debt counselling), you're locked into the process. This is why this decision should not be taken lightly.

What happens if I walk away from debt?

Walking away from your debt, also known as defaulting, could seem like your best option if you're struggling to keep up with bills. However, walking away from debt won't solve all of your problems; the lender can still try to sue you for the remaining amount or sell the loan to a collection agency.

Can one cancel debt review?

The only way you can terminate debt review is if the debt review flag/ warning is removed from your credit report. For this debt review flag to be removed, credit bureaus need to be issued with a debt review clearance certificate.

Why do people go under debt review?

Final thoughts. Debt review is a legal process that provides consumers with a way to manage their debt and avoid being declared insolvent. It involves a debt counsellor who assesses your financial situation and negotiates with your creditors on your behalf to create a debt repayment plan that suits your budget.

Is debt review permanent?

Debt counselling advantages:

There is no permanent record of having undergone debt counselling, meaning that once you have successfully made it through the process, you are able to walk away without anyone holding it against you in the future.

What happens after 7 years of not paying debt?

The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.

How do I remove the red flag from my debt review?

The primary route to flag removal is by completing the debt review process and acquiring a clearance certificate from your debt counsellor or debt review removal expert like Clear Me Now. This certificate serves as proof that you've effectively managed your debts and are no longer considered over-indebted.

What happens after 10 years of not paying debt?

In most states, debt collectors can still attempt to collect debts after the statute of limitations expires. They can try to get you to pay the debt by sending you letters or calling you as long as they do not violate the law when doing so. They can't sue or threaten to sue you if the statute of limitations has passed.

Can I open a bank account if I am under debt review?

Will I be able to open a bank account whilst under debt review? Yes you can, you will not be penalised for being under debt review, a good idea is to also start saving the funds you paid towards your debt previously, these funds can be applied to either settling debt or in case of an emergency etc.

Is it true that after 7 years your credit is clear?

Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.

Who puts you under debt review?

A consumer who is over-indebted may approach a debt counsellor directly, or may be referred to a debt counsellor by his/her creditor/s, the magistrate court or the National Credit Regulator.

Do you pay for debt review?

How much will debt review cost you? This fee is all part of the process as it is paid over by the PDA to us. Once this is paid, the PDA start paying your creditors. You will see this reflected in your debt restructuring payment plan issued to your creditors.

What is the difference between debt review and debt counselling?

The difference between debt counselling and debt review. Debt counselling is the service that a debt counsellor provides to an over-indebted South African consumer struggling with their debt, and debt review is a regulated programme that a debt counsellor will place successful debt counselling applicants under.

How to rebuild credit score after debt review?

Gradually build your credit score up before taking on new debt. Rush taking on new credit immediately after you receive your Clearance Certificate. You don't want a creditor's decline to affect your score negatively. Apply for a small credit to help rebuild your credit score/improve your credit record.