Answered: How long does debt review last?

Do you want to know how long debt review lasts before you apply?

What about how long debt review stays on your name, or how to check whether your name is under debt review?

This post answers all of these questions. Let’s start with the length of the debt review process.

 

How long does debt review last? 

Debt review typically lasts between 36 to 60 months. The exact term is influenced by the amount of debt that needs to be repaid and the agreed repayment terms.

 

 

 

There are a number of factors that can influence the process of debt review, such as how much debt you have accumulated in total or what your current financial capabilities are to begin repaying the debt.

Why does this matter? 

While under debt review, your credit report indicates your debt review status, which restricts your access to additional credit and protects you from making even more debt.

This is known as a ‘credit freeze’, and it allows debt review applicants to focus on repaying the debt that they have.

It is worth remembering that you also get to enjoy the advantages of debt review for the duration of the process.

In some of our other posts, we cover what debt review is, debt counselling fees, plus the difference between debt counselling and debt review — so check these out if you haven’t done so already.

The debt review process can take up to 60 months (5 years), and several things influence how long the process takes.

Here are the most important considerations.

 

 

Factors that influence how long debt review lasts

These are the factor that determine how long debt review could take: 

• • The total amount of debt you have accumulated 
  • How much you can afford to repay every month
  • The agreed-upon terms in your repayment plan  
  • Interest
  • Changes in your financial situation while under debt review
  • Your commitment to the debt repayment process 

 

Let’s unpack each point: 

 

The total amount of debt you have accumulated 

How much debt you need to repay will impact how long it takes to complete debt review. In simple terms, the more you owe, the longer the debt review process may take to complete. 

 

How much you can afford to repay every month

After you have registered for debt review, your debt counsellor will negotiate a lower consolidated repayment amount that suits your financial needs.

This monthly amount will ultimately determine how long it takes to repay all your debt. 

 

The agreed-upon terms in your repayment plan  

Your debt counsellor will outline how long it will take to repay all creditors and complete debt review. They will allocate your repayments accordingly as well as make payments on your behalf. 

 

Interest

Debt comes with interest that continues to accumulate over time, which impacts how long it takes to pay off the entire debt amount.

Thankfully, debt counsellors negotiate with creditors to secure lower interest amounts on behalf of debt review applicants. In many cases securing the lowest possible interest amount. 

 

Changes in your financial situation while under debt review

Sometimes unfortunate events occur that could hurt your financial stability and ultimately affect the repayment agreement and, therefore the repayment term.

Always remember to contact your debt counsellor immediately if something happens that puts you at risk of defaulting on your monthly debt repayment.

 

Your commitment to the debt repayment process 

If you are 100% committed to the debt review process and continue to make payments on time, then you will reap the rewards of completing debt review as soon as you possibly can.

 

 

Want to hear the best part?

You can repay your debt faster if you get more money to put towards repaying your debt. An increase in income could come from anything. Perhaps an increase in salary, or by downscaling and cutting down your cost of living, selling an asset, or picking up a side hustle. 

Your debt counsellor will negotiate a repayment amount that allows you to pay the debts as quickly (and realistically) as possible.

With personal commitment and discipline, there is no reason why you can’t live a life free from debt in just a couple of years!

 

How long does debt review stay on your name?

‘Debt review’ stays on your name until you complete the debt review process, get your clearance certificate and are declared debt-free. This usually takes between 36-60 months, but it can be even faster. After the process, the debt review status is permanently removed.

 

 

At the end of the debt review process, your debt counsellor confirms that you are no longer over-indebted and issues your clearance certificate (also known as form 19). The clearance certificate should be issued within seven days of your final debt repayment. 

Once you get your certificate, you will no longer be under debt review, no longer be flagged by credit bureaus, and will regain access to credit. 

And that’s not all…

There will be no permanent record of your debt review status on your credit report. The process of debt review truly offers you a clean slate when it comes to addressing your debt!  

 

How to check if your name is under debt review 

You can check whether your name is under debt review on your credit report. The debt review status is clearly indicated on every consumer’s credit report. If your credit report doesn’t show that you are under debt review then you are no longer flagged by credit bureaus.

 

 

You can access your credit report through a registered credit bureau such as Experian, TransUnion or XDS, and use tools like MyCreditCheck. Oftentimes, the first report is free, but if you request another one, later on, you may have to pay a small fee. 

Once you have been issued your clearance certificate, credit bureaus are obligated to remove any negative credit information regarding your paid-off debts. Moreover, creditors who have been paid in full must issue paid-up letters on all agreements outlined in the repayment plan, which are then sent to credit reporting agencies to confirm that your name is cleared.

 

Life after debt review 

What happens after debt review? You are officially declared ‘debt-free’! Just imagine what it is like to live your life without owing thousands to creditors each month. 

There are a couple of other cool benefits that pop up after you complete debt review. Here are three, just to name a few: 

 

You have an opportunity to improve your credit score 

While under debt review, your lower repayments will influence your credit score slightly, therefore, when you are officially finished with debt review, you can focus on steadily improving it. 

Before you rush out and start taking credit out again, it is essential that you remain cautious and steer away from accumulating ‘bad’ debt. You can gradually start rebuilding your credit score through a monthly cellphone contract or a credit card that has a very limited monthly repayment amount. 

If you feel as if you are slipping into negative debt habits once again, seek professional help as soon as possible. If you don’t know where to start, don’t hesitate to contact our team who are always happy to assist.  

 

Your life becomes significantly less stressful 

After debt review, you no longer have to deal with pesky creditors, and you have more spending freedom – both helping to reduce your stress levels and truly enjoy your financial freedom. 

 

You can achieve important financial goals 

Here is another really great benefit of completing debt review: Your happier financial situation empowers you to make better financial decisions that will have long-term rewards. 

It can make space for you to set and achieve important financial aspirations like owning a home, investing in your retirement, or sending your children to university.

 

Final thoughts 

Through true commitment and a bit of grit, thousands of South Africans successfully complete debt review every year and kickstart their lifelong journey to maintaining a debt-free life – you could also be one of them! 

If you believe debt review is the best solution to address your debt, contact us to get started. We can help you take the first few steps towards true financial freedom.