The
debt review is the process the debt counsellor makes in investigating a consumer who has applied for
debt counseling. The review will determine whether or not the consumer qualifies for debt counseling.
Someone who is overwhelmed by their debt and defaulting on their payments, applies for debt review when applying for debt counseling. The counselor with then restructure the debt after it’s been analysed and propose the restructure to the credit providers. This proposal is also sent to the Magistrate’s court where they determine if any of the creditors are agreements are reckless.
The debt review process assesses the consumers debts and rearranges the debt according to the provisions made by the National Credit Act. The Act stipulates that if someone experiences difficulty in satisfying their obligations and the creditors allow for a reconsideration of the debt agreement, then the debt review process can begin.
Because the debt review process indicts creditors from taking legal action against consumers, many consumers abuse the provision. The provision also makes debt repayments more manageable, which consumers apply for simply to alleviate their financial obligations.
As a result of the benefits of debt counseling, there has been an approximate 16 percent increase on the number of people applying for it. Counselors are thus having to be more strict as to who qualifies.