10 Apr When Is It Too Late for Debt Review?
Knowing when it’s too late for debt review is crucial for your financial life and saving yourself from debt. Debt review can be a lifeline when you need it most. When debt collectors threaten you, you receive a letter of demand, or you simply can’t take the amount you must pay in repayments, debt review emerges as the ultimate financial saviour.
Debt review is a legal process wherein a debt counsellor negotiates for reduced repayments, lower interest rates, extended repayment periods, and postponed repayment dates on your behalf. Once under debt review, your creditors and debt collectors can’t sue you – it’s illegal under the National Credit Act (NCA). After you’ve completed repayments, you’ll get a clearance certificate, which you can submit to the credit bureaus to have debt review and all the debts that led to it expunged from your credit record.
In this post, we’ll discuss when it is and isn’t too late for debt review, as well as how Debtco Group can be of assistance.
Let’s dive in!
It’s Too Late for Debt Review When…
It’s too late for debt review when you’ve been sequestrated, have a judgment against your name, or are under an administration order.
You’ve Been Sequestrated
It’s too late for debt review when you’ve been sequestrated. You can be involuntarily or voluntarily sequestrated – declared bankrupt – by yourself or your creditors. Under sequestration, assets like your car and valuables will be auctioned to cover at least 20% of the debt. Sequestration can stay on your credit record for as long as 10 years.
There’s a Judgment Against Your Name
Judgments are entered against your name when you receive a letter of demand (S129) and you have to appear in court should you not choose to undergo debt review or enlist an alternative dispute resolution service (debt mediator). In court, the judge will order a judgment against your name, where the court will decide how you’re to pay your debts.
You’re Under an Administration Order
Administration orders can also be voluntary or involuntary. This is when an administrator decides how you’ll pay your debts and distributes your consolidated debt repayment amongst your creditors on your behalf.
It’s Not Too Late for Debt Review When…
If you’ve received an S129 (letter of demand) or struggle to juggle multiple repayments, it’s not too late for debt review.
You’ve Received an S129
S129s are letters of demand. Creditors send these when you’ve defaulted (missed three payments or more) or when you’ve missed just one repayment. The letters state the possible avenues you might take: paying the debt in full, using an alternative dispute resolution agent (a debt mediator), or debt review.
Debt mediators’ services are typically quite costly and don’t offer legal protection. Unless you can afford to pay the debt in full, we recommend debt review.
You Struggle to Juggle Multiple Repayments
If you alternate between paying creditors each month, take out loans to make repayments, or can’t afford living expenses because of repayments, it’s time for debt review. It’s best to apply before receiving a letter of demand.
Let Debtco Group Assist
Debtco Group’s team of debt review experts and debt counsellors would love to help you on your journey to financial freedom. We’ll negotiate for reduced repayments, lower interest rates, extended repayment periods, and postponed repayment dates on your behalf, ensuring you reach debt freedom. To learn more, contact us today.