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Are You Thinking of Leaving Debt Review?

Many people who have been in the debt review process may want to leave after some time. This may be because your debts are paid up or perhaps for other reasons. Would leaving the debt review process before all your debts are paid off be a good idea?


When Your Debts Are Paid Up

If you have managed to pay off all your debts through debt review then: well done! This is no average accomplishment. It takes real determination to stay in the process through highs and lows and progressively pay off all your debts. Once your debts are paid up your Debt Counsellor will assist you with getting a clearance certificate and notifying the credit bureaus to remove mention of your debt review from their records. This can take a few days. They will also notify the National Credit Regulator (NCR) that your debt is all paid up. Then in the future, if you want, you can start to use credit again.

Before Your Debts Are Paid Off

Some consumers receive calls from naughty collections agents trying to trick them into leaving debt review. Others receive poor service from their Debt Counsellor. Others feel that they are not making progress paying off their debts. Some fortunate consumer’s circumstances change for the better and no longer need debt review. Let’s see what could happen in each of these situations.

  • “Your Debt Is Not Getting Paid”

Consumers who are told by collections agents that their debts are not getting paid should consider: since debt review is done via the courts and monitored by the National Credit Regulator, is it likely that their debts are not being paid through debt review? They should also consider that collections agents work for a commission on money they collect. So, if being told that a debt is not being paid it would be good to first get all the facts by contacting (1) your Debt Counsellor (2) your PDA (3) your attorneys (4) your actual bank and not the collections agent.

  • Poor Service

If you receive poor service from a service provider then you may normally consider just changing service providers. For example, you may switch from one mobile network to another. Switching between Debt Counsellors is not quite as easy. Which Debt Counsellor you use is mentioned in court orders for debt restructuring. Credit Providers (and the NCR) link your account to a particular Counsellor and may not want to deal with another.

If you have been getting poor service from your Debt Counsellor then firstly make sure that you have realistic expectation and know what sort of things a Debt Counsellor will actually do. For example, you may be getting collections calls about a debt in your debt review. Don’t blame your Debt Counsellor for this. This is a fault of the collections agent and not your Debt Counsellor. Your Debt Counsellor will help you complain to the right people about the bad collections agent.

If you want better service then be sure to communicate well and follow up until you get the level of service you require.

  • Slow Progress

Do you feel that your debts are taking a long time to be paid off? Are you not seeing your balances go down fast enough? First, go and check the court order which will tell you exactly how long it is going to take to pay off your debt. Many plans are structured over 5 years in order to keep your monthly debt repayments down and allow you to have enough to cover your necessary monthly household costs. You may actually be right on track to settle your debt over time in a reasonable way.

If you want to speed up your debt repayments then you will need to pay a little more each month. Be careful of using money that you should be saving for annual expenses though. Rather save those funds for when they are needed.

  • Improved Financial Circumstances

If you have received a raise or if your partner has found employment this may mean that you suddenly have a lot more available to pay towards your debt each month. Rather than leave debt review and lose the benefits of lower fees and lower interest, think about paying more towards your debts each month. Talk to your Debt Counsellor about how you can do this and which accounts can be focused on.

Be Careful

If you leave debt review suddenly then your credit providers may simply go back to the old payment arrangements and even demand money that would have been paid if you never went into debt review. This can leave you with a sudden very large bill that you can’t actually afford. You will lose all the progress that you have already made inside of debt review and your fees and interest rates will shoot up again. This can cost you many thousands of rand and in some cases has resulted in people losing their assets (like cars and homes).

When deciding to leave debt review, you should do this with the help of your Debt Counsellor and only after considering all the facts.