How long does debt review last - Sandton Debt Counselling (2024)

Our goal is to empower consumers with the correct knowledge to enable them to make the right decisions.

So, how long does the debt review process take

The debt counselling or debt review process typically takes between 36 to 60 months (3 to 5 years) to complete. This duration can vary based on several factors, including the total amount of debt, the interest rates negotiated, the monthly payment capacity, and the individual's commitment to the repayment plan.

The initial phase of the process, which includes debt assessment and notifying creditors, can take up to 60 business days.

During this time, a debt counsellor works with the individual to develop a repayment plan that is affordable and acceptable to all creditors involved. Once the plan is in place, the individual will make a single consolidated payment to a Payment Distribution Agent (PDA), who then distributes the funds to the creditors.

If an individual's financial situation improves, they can increase their monthly payments or pay a lump sum to reduce the period of the debt review.

Additionally, once all debts are repaid according to the plan, a clearance certificate is issued, and the debt review status is removed from the individual's credit profile.

It's important to note that while under debt review, individuals are legally protected from creditors taking legal action against them, and they cannot access new credit until the process is completed.

How Long Will My Name Be Flagged as Under Debt Review

The period during which your name is flagged as under debt review is directly tied to the length of your debt review process. Typically, this process can span anywhere from 36 to 60 months, depending on the amount of debt and the repayment plan agreed upon. During this time, your credit profile will indicate that you are under debt review, which serves as a notice to creditors that you are undergoing a structured debt repayment plan.

This flag is a protective measure, preventing further credit agreements and ensuring that you focus on repaying your current debt. It's crucial to understand that this flag remains until all your debts, excluding your home loan, are fully settled. Once you have successfully met all the conditions of your debt review and your debts are cleared, your debt counsellor will issue a clearance certificate, signaling the next phase of your financial rehabilitation.

How Long Does Debt Review Removal Take

The removal of the debt review flag is a process that begins once you've received your clearance certificate. This certificate is proof that you've fulfilled your obligations under the debt review plan. The time frame for the removal of the debt review status can vary, but typically, it is a swift process, often completed within a few days to a week after the certificate is issued.

The clearance certificate is submitted to all major credit bureaus, along with a request to remove the debt review status from your credit profile. Credit bureaus, by law, are required to update your credit records within five business days upon receipt of the clearance certificate. However, it's advisable to follow up with the credit bureaus to ensure that your credit profile has been updated accordingly.

Can I Get Credit After Debt Review

Emerging from debt review does not immediately restore your ability to access credit. While your debt review status is removed from your credit profile upon clearing your debts, your credit score might still reflect your past financial struggles. Creditors will consider your entire credit history, including your period under debt review, when assessing your creditworthiness.

Rebuilding your credit score after debt review is a gradual process. It involves demonstrating your financial responsibility by managing your finances wisely and making all your payments on time. Starting with small, manageable amounts of credit can help you rebuild your credit profile. It's important to approach post-debt review credit with caution, ensuring that you do not fall back into a cycle of debt.

Conclusion

The journey through debt review is a path towards financial stability and responsibility. While the process has its duration and challenges, understanding these key aspects can empower you to navigate it more effectively. Remember, the goal of debt review is not just to clear your debt but to foster habits that will lead to lasting financial health. Patience, discipline, and a proactive approach towards managing your finances are your best allies in emerging from debt review stronger and more financially savvy.