How Does the Debt Review Process Work in South Africa?

A Step by Step Guide to the Debt Review Process

What is Debt Review and How does it Work?

Debt review can reduce your monthly payments and offers immediate protection against legal action.

The advantage of being under debt review is that while you're working towards settling your debts, your creditors cannot initiate any legal proceedings against you.

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Phase 1

Establishing Protection

  • Immediate Legal Protection: As you enter the process, we work swiftly to immediately protect you from any legal actions by your creditors.


  • Financial Evaluation & Advisory: Assessing your financial position and offering guidance on Debt Solutions, ensuring compliance with the National Credit Act.


  • Prompt Creditor Notification: Within 5 working days, we take action to notify your creditors, providing immediate protection for the initial 60 business days.


  • Protected Credit Status: Your credit status won’t be harmed; we keep you flagged as “under debt review” on credit bureau records, ensuring your protection
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Phase 2

Preparing Your Accounts for Review

  • While undergoing debt review, you are not allowed to take on any new debt or utilise any credit facilities, with the exception being for the purpose of consolidating your current debts.
  • iNDC will instruct each of your credit providers in writing to cancel any automatic debit orders or payroll deductions on your accounts.
  • The credit providers issue a certificate of balance that shows your remaining debt and the applicable interest rates.
  • We will then determine if you are over-indebted and inform your credit providers of the outcome.
  • We will then begin negotiations with your creditors to lower your monthly payments to an amount that is manageable for you, based on your affordability.
  • You will then agree to this new payment plan and make regular monthly payments through a Payment Distribution Agent (PDA).
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Phase 3

Legal Finalisation of Your Debt Plan

  •  A Payment Distribution Agent allocates your payments according to the agreed payment plan or debt rearrangement order.


  • You ensure that credit providers receive the agreed-upon monthly payments regularly.


  • iNDC directs Debt Review Attorneys to request that the court formalizes your debt rearrangement plan into a court order.


  • The procedure is completed once a court issues a debt rearrangement order.


  • We review your financial situation annually.


  • iNDC issues a clearance certificate once all your debt is fully paid off

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Frequently Asked Questions

FAQ

How long does the Debt Review Process take?

The duration of the debt review process in SA varies based on individual circumstances. Initially, the process is initialised within five days after applying. The protection provided against legal action extends for 60 business days, providing immediate relief. The entire process might take several months or even years, depending on the complexity and the individual's commitment to the payment plan.

What if I need a loan while under Debt Review?

While under debt review, accessing new credit or taking out loans might not be possible. One of the primary conditions of being under debt review is to avoid further debt accrual. Once the debt review process is completed, and you have received a clearance certificate, you can consider reapplying for credit.

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