Debt counselling is a debt rehabilitation process, which enables South African consumers to take control of their financial situation and bring them back to financial well-being.
Clients will not be allowed or able to apply for more credit or use their credit cards, while under debt review.
DebtBusters asks client’s to destroy all their credit cards or return them to their credit providers, in order to prevent them from being tempted to take out additional credit and further deteriorate their financial situation.
Clients that fail to adhere to the requirements and take out further credit during the plan will face serious repercussions.
Credit providers may terminate the client’s debt review and start legal proceedings.
Once you have completed the debt counselling process, a clearance certificate will be issued to you, which will state that you have been rehabilitated through the Debt Counselling process. This will be used to remove all listings from your credit bureaus that you are under Debt Counselling, as it will state that you have solved your debt problem. You will then be able to take out credit.
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A Form 17.4, will be issued in addition to this, which is a debt counselling cancellation form. This will also remove you from all credit bureaus. If you wish to cancel your debt review, before you have paid up all of your debt, your outstanding debt will remain and you will resume to the original instalments.
A Clearance certificate needs to be issued meaning you have been rehabilitated through the Debt Counselling process, this will remove all listing from credit bureaus that you are under Debt Counselling.
If you are still under Debt Counselling you will not be able to access any form of finance as this will violate the contract you have with your current creditors. If you have received your clearance certificate or cancelled your Debt Counselling you will then be able to apply for finance through the usual process.
FAQs
While in debt review, you cannot access further credit. You cannot use your store cards, credit cards or apply for a loan. Once you have exited the process, you can reapply for credit.
Can you apply for a credit card while in a debt management program? ›
And just a quick reminder: Some card companies void the benefits of a debt management program – lower interest rates, reduced monthly payment – if the consumer applies for new credit cards, while on the program. That penalty does not extend to car loans, mortgages, student loans and other types of debt.
Can you still use credit cards during debt consolidation? ›
Yes, although it depends on your situation. If you have good credit and a limited amount of debt, you probably won't need to close your existing accounts. You can use a balance transfer or even a debt consolidation loan without this restriction. Getting a balance transfer credit card never comes with restrictions.
How long after debt review can I apply for credit? ›
Technically, you should be able to do so ONE week after receiving your Clearance Certificate. According to the National Credit Regulator (NCR), Credit Bureaus, however, have up to 21 days to update your profile. We advise waiting a little longer and monitoring your credit report for about 3-4 months.
What is the longest you can be under debt review? ›
Typical Duration of Debt Review
Debt review is not a quick fix. It's a thorough process typically spanning 3 to 5 years, depending on the aforementioned factors. During this period, consumers are expected to live within a budget and meet their renegotiated payment obligations.
Can I pay my accounts while on debt review? ›
The answer: Yes, you can pay your creditors directly while under debt review if you choose to do so from the start. A consumer in debt review has two options for repaying their debts, according to the National Credit Act: Pay your debt yourself, or allow your debt counsellor to do it for you.
Can I use my credit card while on a DMP? ›
While you can continue using credit cards that aren't in your DMP, it may not be the best decision. If you are not careful, you could end up accumulating more debt. This added financial burden could strain your budget and make it challenging to meet your monthly DMP obligations.
Do you have to close credit cards for debt management? ›
DMPs can help you pay down your unsecured debt considerably faster. The tradeoff is that you'll have to close those accounts. For example, any credit cards you choose to include in the DMP will be closed.
Can I get credit if on a debt management plan? ›
If you're in a debt management plan (DMP), it may have an impact on your credit rating. This could mean you find it more difficult to get credit in the future. This page explains what you need to know about how a DMP could affect your credit rating.
How long is your credit bad after debt consolidation? ›
Debt consolidation itself doesn't show up on your credit reports, but any new loans or credit card accounts you open to consolidate your debt will. Most accounts will show up for 10 years after you close them, and any missed payments will show up for seven years from the date you missed the payment.
Summary: Best Debt Relief Companies of July 2024
| Company | Forbes Advisor Rating | LEARN MORE |
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| Money Management International | 4.0 | Learn More Read Our Full Review |
| CuraDebt | 3.9 | Learn More |
| New Era Debt Solutions | 3.8 | Learn More On New Era's Website |
| Freedom Debt Relief | 3.7 | Learn More On Freedom Debt Relief's Website |
3 more rowsBottom line. If you do it right, debt consolidation will only cause a minor hit to your credit, after which your scores should quickly rebound.
Can I get credit while under debt review? ›
You will Not Qualify for a Loan Under Debt Review Anyway
People who leave early or default on payments won't be able to access new credit until they are unflagged, when all debts have been settled.
Can I buy a car after debt consolidation? ›
Answer and Explanation: No, debt consolidation doesn't affect buying a car. When a company utilizes its earnings in making purchases for a car, there is no relationship with the outstanding debts in the company.
How can I finish my debt review faster? ›
A: Yes, that is a great way to speed up your Debt Review program. When you have extra income (like a tax repayment, a bonus or salary increase) you can contact one of the DebtSafe Debt Counsellors to make the arrangements for you.
Can you borrow money while under debt review? ›
You will need to wait until your debt review period is over if you do decide to obtain a loan though. Reviewing your debts is a step toward financial freedom. You won't get any more unsolicited loan and credit card offers while under debt review.
Can I skip payment on debt review? ›
If you fail to make payment in no uncertain terms, you are taking a step back and further away from reaching financial freedom again. Your creditors will have sufficient legal grounds to terminate your Debt Review and commence legal action against you.
Can debt review be declined? ›
Debt review is a process that when carried out correctly, can significantly improve a person's financial life, reduce their stress levels and allow them to live a meaningful and happy life once again. With this being said, not everyone can qualify for debt review and there are instances where it can be declined.
What are the consequences of being under debt review? ›
Once you are legally under debt review, a notice goes out to all credit bureaus to 'freeze' your access to new credit. Simply put, this means you won't be able to make more debt while under debt review (check out this post to learn more about debt review and loans).
