If you want to know if you can be blacklisted while under debt review, the short answer is no. Here is what you need to understand about debt review.
Can you be Blacklisted if you are under a Debt Review?
Debt review was introduced by the National Credit Act (NCA) in 2007 to prevent South African consumers from being blacklisted. Once you have a debt review, you are protected by the NCA and are legally protected from being blacklisted. If you are on the blacklist and decide to request a debt investigation, your credit report is likely already badly affected and it may take years to get
back to normal. However, unlike the blacklist, debt reviews are removed from the name when all debts are cleared. Once the debt is paid off, a clearing certificate will be issued and your name will be removed from the debt review. Once your name is clear from the debt review process, you can start building your financial situation from scratch. Your credit score will be reset to zero. So you won’t be blacklisted for debt consolidation. Instead, debt checks can prevent you from being blacklisted.
What is Debt Review?
Debt Review is the process of helping clients who are struggling to meet their debts. A debt counselor will approach your creditors and make payment arrangements on your behalf, reducing your monthly payments to a manageable amount. If you are struggling to pay off your debt and want to improve your credit score, a debt review may be an option. negotiating a reduction in the amount of the loan, resulting in a lower monthly repayment. A debt counselor has created a new repayment schedule for you to follow. You only have to make one reduced repayment each month. A debt counselor created a new budget as part of the process so you have enough money to pay off your debts and make a living.
What does it mean to be blacklisted?
Technically, blacklists no longer exist, but the term is still commonly used to describe “impaired” creditworthiness. This means that your name will be negatively marked due to late payments, etc. Your credit report lets creditors know exactly what your credit history looks like. Also, based on repayment history, creditors grant access to credit based on their financial history, among other
factors. The blacklist doesn’t technically exist, but a bad credit history can make your financial situation worse.
What is the difference between a debt review and blacklisting?
The Debt Review is a legal process for insolvent South Africans to become debt free. This process was introduced by the National Credit Act (NCA) to prevent consumers from being blacklisted. The difference between blacklisting and debt screening is that blacklisting is an industry term that can affect lenders. A debt check is a legal process put in place to help insolvent South Africans.
If you are subject to debt review, you will not be blacklisted. If you are subject to a debt review will view your decision as an attempt to restore your financial position. Your credit report will be flagged to prevent further indebtedness, but your credit report will not be adversely affected. After receiving the clearance certificate, you can re-borrow and re-establish your financial situation responsibly.