Debt Review - Frequently Asked Questions

Entering debt review in South Africa is a significant decision for individuals facing financial difficulties. It offers various benefits but also comes with some potential drawbacks. Here's a comprehensive overview:

Benefits

1. Protection from Creditors: Once you are under debt review, your debt counsellor notifies all your creditors, and legal action to collect debts or repossess assets is put on hold. This protection allows you to focus on repaying your debts without the constant threat of legal proceedings.

2. Affordability: Debt counsellors assess your financial situation and create a restructured payment plan based on what you can afford. This plan ensures that you can meet your monthly obligations while still covering essential living expenses.

3. Interest Rate Reduction: Often, debt counsellors can negotiate lower interest rates on your outstanding debts, making it easier to pay off what you owe and reducing the total amount payable over time.

4. Consolidation of Payments: Instead of dealing with multiple creditors, you make a single, consolidated payment to a Payment Distribution Agency (PDA), which then distributes the funds to your creditors. This simplifies the repayment process.

5. Financial Rehabilitation: This process helps consumers manage their finances better and avoid future debt problems. Debt counsellors provide guidance and support to help you develop healthier financial habits.

6. No Blacklisting: Being under debt counselling does not result in blacklisting. Instead, your credit record reflects that you are under debt counselling, which is seen as a positive step towards managing your debt responsibly.

7. Clear Exit Plan: Upon successful completion of the process, you receive a clearance certificate, indicating that you have settled all your restructured debts. This allows you to rebuild your credit record.

Potential Drawbacks

1. Credit Restrictions: While under debt counselling, you cannot obtain new credit. This restriction ensures that you focus on repaying your existing debts but can be challenging if you need to make unexpected expenses.

2. Extended Repayment Period: While the monthly payments are more manageable, the total repayment period may be extended, meaning it might take longer to become debt-free.

3. Impact on Credit Score: Initially, entering this process can negatively impact your credit score. However, as you make consistent payments, your creditworthiness gradually improves.

4. Fees and Costs: Debt counselling services come with fees, including an initial application fee and monthly after-care fees. While these are regulated by the National Credit Regulator (NCR), they can add to your monthly expenses.

5. Lifestyle Adjustments: Being under debt review requires significant lifestyle changes and disciplined budgeting. You may need to cut back on non-essential spending and stick to a strict financial plan.

6. Potential Mismanagement: Choosing a reputable and registered debt counsellor is crucial. There are risks of mismanagement or fraud if you work with unqualified or unscrupulous practitioners. We are registered and have been so for the past 10 years. Contact us today for your debt management requirements.

7. Commitment Required: This process is a long-term commitment. It requires dedication and consistency to follow through with the repayment plan until all debts are settled.

Conclusion

Debt Counselling offers a structured and legally protected way to manage and repay debts, providing relief from creditor pressure and a path to financial rehabilitation. However, it also requires a willingness to make lifestyle changes and a commitment to a long-term repayment plan. Understanding both the benefits and potential drawbacks can help you make an informed decision about whether the process is the right solution for your financial situation.

This process which is also known as debt counselling, is a process designed to help over-indebted consumers manage and repay their debts in a more structured and manageable way. Here’s how it works:

1. Assessment: A registered debt counsellor will assess your financial situation, including your income, expenses, and outstanding debts, to determine if you are over-indebted.

2. Application: If you are deemed over-indebted, you can formally apply for debt relief. The debt counsellor will notify all your creditors and the credit bureaus that you are under debt counselling.

3. Debt Repayment Plan: The debt counsellor will negotiate with your creditors to create a restructured debt repayment plan that reduces your monthly payments to an affordable amount. This plan may also include reduced interest rates and extended repayment terms.

4. Court Approval: The restructured debt repayment plan is submitted to the Magistrate’s Court for approval. Once approved, it becomes a legally binding agreement on all parties involved.

5. Payments: You make a single monthly payment to a Payment Distribution Agency (PDA), which distributes the funds to your creditors according to the restructured plan.

6. Completion: Once all your debts are repaid according to the restructured plan, you will receive a clearance certificate, indicating that you have successfully completed the process and are no longer over-indebted.

The costs associated with this process are regulated by the National Credit Regulator (NCR) and typically include:

1. Application Fee: A once-off fee charged at the beginning of the process.

2. Debt Counselling Fee: A fee for the debt counsellor’s services, usually calculated as a percentage of your monthly debt repayment amount.

3. Monthly After-Care Fee: A monthly fee for ongoing management and administration of your debt managment process.

4. Legal Fees: Costs associated with obtaining court approval for your restructured debt repayment plan.

5. Payment Distribution Fee: A fee charged by the Payment Distribution Agency (PDA) for distributing your monthly payment to your creditors.

One of the key benefits of debt counselling is that it provides protection from legal action by creditors. Once you are under debt review, your assets, such as your home and car, are protected from repossession, as long as you comply with the restructured debt repayment plan. This protection allows you to retain your essential assets while working towards becoming debt-free.

Yes, you can apply for debt review even if you are already facing legal action from creditors. However, the timing is crucial. If a creditor has already obtained a court judgment or has initiated legal proceedings to repossess an asset, that particular debt may not be included in the debt counselling process. It’s essential to consult with us as soon as possible to determine the best course of action.

The duration of the debt review process varies depending on the amount of debt you have and your ability to make regular payments. On average, it can take anywhere from three to five years to complete this process. We will provide a more accurate timeline based on your specific financial situation.

Withdrawing from the debt review process is possible but not straightforward. If you wish to exit debt review, you will need to settle all your outstanding debts in full or obtain a court order to rescind the debt review status. It’s important to discuss the implications and possible consequences with us before making such a decision.

While under debt review, your credit record will reflect that you are undergoing debt counselling. This status may initially lower your credit score, but it shows that you are taking responsible steps to manage your debt. Once you have successfully completed this process and received a clearance certificate, your credit record will be updated, and the status will be removed, allowing you to rebuild your creditworthiness.

No, you cannot use your credit cards or take on any new credit while your debt are being restructured. The purpose of debt counselling is to help you manage and repay your existing debts, so taking on new credit would be counterproductive. We will advise you on how to manage your finances without relying on credit during the process.

1. We steam roller ahead and take charge. Choosing our professional credit clearance service means that we deal with your creditors, collection agencies, attorneys and the various credit bureaus on your behalf.
2. It’s our time — not yours. You can spend a lot of time and effort working on your credit reports. Each unlawful or paid credit report listing is subject to quite a few laws. Depending on the situation, it may also be necessary to take action with the original creditors, collection agencies, or credit bureaus.

By subscribing for our credit clearance services, you allow us, the professionals, to review and gather information about your credit report, draft letters, follow-up, etc. 

Our service allows you to free up your time to focus on other tasks instead of worrying about checking your credit report for inaccuracies.

1. We know the laws and the ins and outs of credit bureaus. Our in-depth knowledge and understanding of these laws allow us to assist you in getting the credit report you deserve. The Credit Act laws will be used to your advantage by our Credit clearance professionals. 

Yes, we are registered with the National credit Regulator, CIPC and various other industry watch dogs. 

The term Credit Utilisation refers to how much of your available credit is being used based on the balance of your current accounts compared to your credit limits. It’s like using a bucket of water: if the bucket is full, there is less room to add water, and the same applies to your credit utilization ratio. If the bucket is empty, you have more space to add debt.

Our company began operating in 2006 and has established itself as a credit clearance specialist, debt negotiation specialist, credit report and settlement experts.

Debt counselling and credit clearance are two different processes. If you have paid off most of your debts or have old accounts that need to be closed, then this process is available for you. 

For consumers who cannot pay their debts, we offer debt counselling services. 

1. ID Copy or smart card copy
2. Proof of residence
3. Signed power of attorney
4. Any paid-up letters

To speed up the process we would appreciate any paid-up letters but we will be able to obtain this if you did not receive paid up letters.

Credit score increases are dependent on several factors. There is no easy answer to this question without proper analysis. 

The rule of thumb is that your credit score should improve with each removal or update. However, keep in mind your debt to income will play a big part in credit scores. We will advise accordingly on how to improve this for a better score. 

Revolving accounts are a type of credit account that allows you to borrow against a pre-approved limit and requires that you make minimum payments based on the balance on the account. With a revolving account, you can borrow money up to a certain limit and pay back the money you borrowed with interest. The minimum payments are usually based on the amount of the balance on the account. If you pay off the balance in full, you can borrow more money up to the same limit.

If you are happy with the information we provided, you checked our reviews and confirmed our registration information and are now ready to proceed with blacklisting removals and credit clearance, kindly click this link below and complete your details.

As a client of Credit Salvage, we will take your profile to be that of our own. We will take every step possible to ensure you have an updated and cleared credit record in terms of what the Credit Act permits.

Credit providers request your credit report after you apply for credit, which can affect your credit score. Enquiries are like ripples in a pond- each one will create a wave that spreads out and can affect other areas of your finances. So if you want to make sure your credit score remains healthy, it's important to minimize the number of enquiries made.

Payment History refers to the accounts listed on your credit report, including credit cards, vehicle finance loans, home loans, clothing accounts and other loans with a history of payment information. This is like a timeline of a consumer's financial situation, tracking their payments over time and providing a clear view of their creditworthiness.

It normally takes our credit clearance process between four and six weeks to resolve all of the adverse listings. This includes creditor negotiation and the compulsory 20 business day credit bureau process.

Please bear in mind that if you have plenty of adverse accounts to sort out, it is going to take a little bit longer.

Yes! We deal with South Africa's 5 largest credit bureaus, and we ensure each credit bureau profile gets a spring clean before we close your file. 

You do not need to pay anything upfront to access our world-class service, and we do not wait until we receive all funds before we begin.

Once a successful debit order is activated, we begin the process immediately. In most cases, we have cleared or updated clients profile before even receiving a cent for our services.

Yes! We investigate all old accounts from all 5 credit bureaus. We advise which accounts will qualify for prescription and which needs settlement negotiations

• Enforcement action default - 1 year 
  • These listings can be removed prior to the 1 year
• Debt Counselling - Until a clearance certificate is issued by a debt counsellor
  • This listing can be removed if a court declares you no longer over indebted. This is only in cases where there is no debt review court order in place.
• Rehabilitation court order - 5 years - This listing cannot be removed 
• Administration order - 5 years - This listing can be removed if the admin order is rescinded
• Trace Alerts - This listing can be removed
• Judgements - 5 years - This listing can be removed. 

Your credit score will increase if you build a good payment history, which shows prospective credit providers that you pay your accounts on time.

In addition to hurting your credit scores, missed payments make you look like a higher-risk borrower.

Enforcement, adverse listings can be removed, while payment profiles will remain on your profile for up to 5 years. These listings can only be updated to reflect as paid in full. Subsequently, we will need to boost credit scores to negate any adverse effects from your poor payment history. It is important to sort out arrear accounts as a matter of urgency.

NB please be aware of companies who promises you to delete an adverse payment profile.

Delinquent accounts are accounts where payments are far past due and are in default.