Are you grappling with the question, “Will I lose my assets during debt review?” You’re not alone. This is a common concern among those considering the debt review process, a solution introduced by the National Credit Act (NCA) to assist over-indebted South Africans.
The Debt Review Process Explained
Debt review, also known as debt counselling, is a regulated process aimed at helping over-indebted consumers regain financial control. A registered debt counsellor works on your behalf to negotiate with creditors, aiming to extend your debt repayment terms and reduce your monthly repayments.
Safeguarding Your Assets in Debt Review
A significant advantage of debt review is asset protection. Once you’re officially under debt review and the court approves your repayment plan, your assets – including your home and car – are protected. This means that as long as you adhere to the agreed-upon payments, creditors cannot repossess your assets or take legal action against you for debts included in the review.
Sequestration and Debt Review
Sequestration is a legal process where creditors can apply to court to declare you bankrupt, which involves the loss of assets. However, to apply for sequestration while under debt review, you must first approach the court to rescind the debt review order. If the court agrees, you can then apply for sequestration. Be aware, sequestration has long-term consequences on your credit record and may result in the loss of your assets.
In Conclusion
Debt review is designed to help you manage your debts more effectively and protect your assets from repossession. However, understanding the process fully and committing to the agreed-upon repayment plan is crucial. If you’re considering debt review, it’s advisable to consult with a registered debt counsellor to guide you through the process.
For assistance with your debt review needs, contact us on info@thumaminadebt.co.za or via WhatsApp on 063 365 7443.
