Disputes: Why following through with debt review is so important [Part 2/4]

The South African government understood that its citizens needed a debt relief mechanism that works for the people. Life is hard and sometimes, we get ourselves into financial difficulties. In the past, the only options available were administration (which was not very well regulated) and sequestration (which was very costly and only for large amounts of debt). To remedy this situation, debt counselling (also known as debt review) was introduced by the National Credit Act in 2007. The objective of debt counselling is to hold off legal action and to negotiate lower monthly repayments so people can cope better on their income and pay off their debts. In the Compuscan Customer Care call centre, we speak to many people who decide after a few months of debt counselling that debt review is not for them. One of the main reasons, is because they want to apply for more credit, which you can’t do while under debt review. Another reason is that they feel their debt counsellor is not performing as expected.

Our advice is always: DON’T WITHDRAW! It’s better to complete your debt review.

Why? After completion, you will be issued with a clearance certificate that will allow credit bureaus to remove your negative repayment history and give you a clean report. If your counsellor is not performing as expected, you can report them to the National Credit Regulator and ask them to transfer you to a more suitable counsellor. The regulator’s debt review department is very well set up and handles these complaints very efficiently. If you feel that you have to withdraw, don’t simply stop allowing payments to be made. This is not going to cancel your debt review and the flag will remain on your name. The only way to exit at this point is to get a court order to state that you are no longer over-indebted. It’s important to remember: Even though your counsellor didn’t go to court when you applied for debt review, you can only exit debt review with a court order. It’s definitely worth your while to reconsider withdrawing. The benefits of rehabilitating your finances and your credit report outweigh the short-term benefits of cash in hand.

If you would like to find out more about debt review or your credit report, please contact our Customer Care line on 0861 51 41 31 or email [email protected]