Your Debt Review Questions Answered

Debt review is a formal debt solution aimed at helping South Africans struggling to get out of debt. It involves a debt counsellor assessing your financial situation, negotiating with creditors to reduce interest rates and monthly payments, and creating a restructured repayment plan. This page answers common questions about the debt review process, its implications, and how WY Debt can assist you in regaining control of your finances.

Can I buy a house while under debt review?

It’s unlikely to get a home loan while under debt review, as most lenders require you to be debt-free. Once you receive a clearance certificate, you can work on improving your creditworthiness and apply for a home loan.

Can I get a loan after a debt review?

It might be difficult to get a loan while under debt review. However, once you receive a clearance certificate, you can start rebuilding your credit score, making it easier to qualify for loans in the future.

Can I remove myself from debt review?

It’s not possible to remove yourself directly from debt review, but you do have options. A registered debt counsellor can help you exit debt review under certain circumstances:

  • All debts paid: If you’ve settled all your debts, your debt counsellor can issue a clearance certificate to remove you from debt review.
  • Court application: You can apply to the court to be declared not over-indebted, even if you haven’t paid all your debts. However, this involves legal costs and may be complex.

Can debt review be cancelled?

Yes, debt review can be cancelled under certain circumstances:

  • Settling all your debts
  • Court order declaring you not over-indebted
  • By mutual agreement with your creditors

How do I remove the debt review flag for free?

The most straightforward way to remove the flag is by settling all your debts and receiving a clearance certificate. Applying to the court can also remove it, but legal fees will apply. For a stress-free process get help from NCR-accredited debt counsellors like us here at WY Debt.

How long before debt review is removed from your name?

Once your debts are settled and your debt counsellor issues a clearance certificate, the debt review flag should be removed from your credit report within a few days. If there’s a delay, contact your debt counsellor and the credit bureaus.

How much does it cost to cancel debt review in South Africa?

The cost of cancelling debt review varies depending on your situation and the debt counsellor’s fees. You may incur costs for:

  • Legal fees due the Debt review being a legal process

How soon can I buy a car after debt review?

You can buy a car after receiving a clearance certificate. Having a good credit score will help you get better interest rates on car loans.

Is it true that after 6 years your credit is clear?

While some negative information is removed from your credit report after a certain period (usually five years), debt review may remain longer. It’s removed once a clearance certificate is issued, regardless of the time passed.

What are the disadvantages of debt review?

  • Limited access to credit: You may struggle to get loans while under debt review.
  • Impact on credit score: Debt review is noted on your credit report and may affect your future credit applications.
  • Fees: Debt counsellors charge fees for their services.
  • Time: It can take time to complete the debt review process and become debt-free.

What happens when you cannot pay your debt review?

If you can’t afford your debt review payments, talk to your debt counsellor immediately. They can explore options like:

  • Re-negotiating your repayment plan with your creditors
  • Applying for a reduced instalment or payment holiday
  • In extreme cases, applying for debt review to be rescinded

Remember, we’re here to help. Contact WY Debt today if you have any questions or need help getting free from debt.

What are the main benefits of debt review?

Debt review helps you get back on track with your money. It stops debt collectors from bothering you, keeps your things safe, and makes your monthly payments smaller. It can even lower the interest you pay on your debt.

I’m worried about not getting more credit while under debt review. Is this a good thing?

Yes! It might seem bad at first, but it’s actually good for you. When you have too much debt, the goal is to get rid of it, not get more. Debt review helps you focus on paying off what you owe.

What happens if I miss my payments under debt review?

It’s important to stick to the plan and pay the amount you agreed to. If you miss payments, your debt review could be stopped and you might face legal action from your creditors.

Can all my debts be covered by debt review?

No, not all debts are included. Debts with a judgment, like some home loans or car loans, cannot be included. Also, debts like unpaid school fees or municipal levies are not covered.

Can I change my mind about debt review once I start?

Once you have a court order for debt review, you cannot stop it until all your debt is paid. It’s a commitment to get your finances in order.

If I am married in community of property, does my partner also need to apply for debt review?

Yes, if you are married in community of property and both of you are struggling with debt, you both need to apply for debt review together.

Will debt review take longer to pay off my debt?

It might take a bit longer because your payments are smaller. But if you get more money, you can always pay more each month to finish sooner.

Will there be extra fees with debt review?

Yes, there are fees for debt counselling and legal fees. But these are usually included in your repayment plan, so you don’t have to worry about extra payments.

Can creditors say no to the lower payments under debt review?

They can, but they are usually willing to accept lower payments if the offer is fair and you are committed to paying off your debt through the debt review plan.

How quickly will my situation improve with debt review?

You’ll feel better right away! You’ll have a budget that works for you and your creditors will get paid what you can afford. How long it takes to fully improve depends on how much debt you have and if your finances get better over time.

What does “pro-rata basis” mean in a debt review proposal?

It means the creditor you owe the most gets a bigger share of your monthly payment.

Is debt review like a loan?

No, it’s not a loan. It’s a way to reorganize your current debts so you can pay them off without getting into more trouble.

Does it matter if I own my home or not when applying for debt review?

No, it doesn’t matter if you own your home or not. You can still apply for debt review.

Can I apply if I am unemployed?

You can if you are married in community of property and your partner works. But it’s important to try and find work as soon as possible.

Will I be blacklisted after debt review?

No, you won’t be blacklisted, but your credit report will show you are under debt review. This is removed once you pay off your debts.

Will I have enough money for daily expenses under debt review?

Yes, your debt counsellor will make sure your repayment plan leaves you enough money for everyday living costs.

Can I get out of debt review early if my finances improve?

You cannot stop the debt review completely, but you can change your payments to pay off your debt faster.

Are there any debts not included in debt review?

Yes, some debts are not included, like doctor’s bills, cell phone accounts, or debts where legal action has already started.

What happens to my credit cards and accounts when I apply?

Your accounts will be frozen, so you can’t use your credit cards or overdraft. You should keep paying what you can until the debt review is approved.

Why do I need a debt counsellor?

Debt counsellors are experts who help you talk to your creditors, make a payment plan you can manage, and avoid legal trouble.