Can I Skip Debt Review Payments?

In times of financial hardship, debt review serves as a beacon of hope, providing a pathway for over-indebted consumers to rehabilitate their finances or just to lessen the financial burden.

Introduced by the National Credit Act of 2005 (NCA), debt review not only prevents credit providers from repossessing assets but also empowers consumers with better financial management tactics, helping them move closer to achieving financial freedom.

The volatility of economies, sudden market crashes, and unforeseen socio-political factors often have a devastating impact on household finances and the cost of living. This is what we are busy seeing in South Africa with all the interest rate hikes, the food prices skyrocketing, inflation and more.

During these challenging times, consumers already placed under debt review but still facing financial strain might wonder, "Can I Skip Debt Review Payments?".

The answer is a resounding no. When you are placed under debt review, you enter a legal process that negotiates affordable monthly debt instalments. This process keeps your assets safe. To skip debt review payments or suspending the services of a debt counsellor, will get the concessions granted by creditors revoked and can lead to legal action as well as repossession of your assets.

Debt review offers a rescue plan for over-indebted consumers struggling to meet their monthly obligations. However, its effectiveness depends on the client's commitment to completing the process. Every monthly payment in the agreed-upon repayment plan must be honored to maintain the integrity of the debt review agreement. Not paying your debt review could be seen as a breach of the agreed reductions creditors provide.

When entering debt review, a qualified debt counsellor assesses outstanding debts and constructs a repayment plan by negotiating lower monthly instalments with creditors. This consolidated and affordable payment structure allows consumers to cover their household expenses more comfortably. Moreover, creditors are informed about the debt review, preventing them from taking legal action or repossessing belongings.

Failure to make debt review payments and the suspension of debt counsellor services can empower creditors to seek alternative measures of debt collection. They may terminate the debt review arrangement and involve attorneys or debt collectors. If creditors obtain judgments to collect the debt, they can enforce collection based on the original terms, worsening the financial difficulties faced by individuals already in distress.

Nadia de Weerdt, head Debt Counsellor at Sandton Debt Counselling, strongly advises against skipping debt review payments. Instead, clients should reach out to their debt counsellor at the first sign of struggling to meet the instalments. By proactively communicating their challenges, clients can receive guidance on budget adjustments and support, tailored to their unique circumstances, to address affordability issues effectively.

Qualified debt counsellors at Sandton Debt Counselling engage with creditors on a case-by-case basis, appealing for a review based on the client's merits. The client's affordability challenges, history, and efforts to rectify the situation and commit to debt repayments are taken into account. Clients are also guided to explore alternative strategies to improve affordability, accompanied by empathetic financial advice and suggested lifestyle adjustments.

In cases of significant life events such as job loss, the National Credit Act provides a framework for debt counsellors to negotiate grace periods or concessions with creditors for up to three months. Additionally, SDC could integrate third party credit life insurance, covering debt repayments for a period of up to 12 months, provided premiums are up to date, and the waiting period has ended. These insurances will help you to not skip debt review payments, so ask your debt counselling company about this.

De Weerdt encourages individuals experiencing tough economic times and struggling to meet their debt repayments to reach out to debt counsellors for assistance. By seeking professional guidance, consumers can navigate through this challenging phase of their lives and work towards achieving financial stability.

Debt review offers a lifeline to over-indebted consumers, helping them regain control of their finances and providing a path towards a brighter financial future. By honoring your debt review obligations, you not only demonstrate your commitment to resolving your financial difficulties but also ensure the continued protection of your assets. It is essential to view debt review as a long-term commitment and approach it with diligence and responsibility.