Debt review is a great way to pay off your debts quickly and efficiently, especially since you don’t have to deal with creditors.
But if you are interested to see those debts paid off differently, then you might be wondering: can I pay my creditors directly while under debt review?
It’s a good question that must be answered and understood before stepping into anything. That is why we are here to answer you and give you all the details you need to know about it to help you make an informed decision.
So, let’s jump right in.
Side note: If you’re not that familiar with debt counselling (debt review)? Start by reading through these posts first:
- What is debt counselling?
- What is debt review?
- The advantages and disadvantages of debt counselling (debt review)
- How debt review (debt counselling) works
Can I pay my creditors directly while under debt review?
The answer: Yes, you can pay your creditors directly while under debt review if you choose to do so from the start.
A consumer in debt review has two options for repaying their debts, according to the National Credit Act: Pay your debt yourself, or allow your debt counsellor to do it for you.
If a consumer is organised and doesn’t mind the risk and effort, they can repay each creditor according to the debt counsellor’s repayment plan.
On the other hand, consumers who want convenience and less risk can pay the debt counsellor, who will distribute the debt using a Payment Distribution Agency (PDA). The process typically uses DebiCheck, so it’s extra secure.
In most cases, people choose to let the debt counsellor distribute the payment for them.
Make sure to speak to a Debt Counselor anyway because they will recommend what’s best for you depending on your circ*mstances.
Let’s understand your options better.
What is your estimate?
Try our debt reduction calculator to calculate your lower monthly debt instalment*.
*The calculation is an estimate actual amounts may vary.
What is your estimate?
Try our debt reduction calculator to calculate your lower monthly debt instalment*.
*The calculation is an estimate actual amounts may vary.
Paying creditors under debt-review
Since you are presented with two repayment options, it’s a must that you study them thoroughly to build your decision on the pros and cons of each.
Repayment options
Paying creditors directly
Fair warning: consider this option cautiously if you have had trouble paying your creditors on time in the past.
Here is everything you need to know:
- Each month, you will be required to make a lot of payments to various accounts (with associated fees). You need to make sure each credit provider gets the right amount.
- Accounts get different amounts each month according to the plan. Payments to these accounts need to be made each month accurately since the amounts can change frequently.
- In order to resolve disputes and reconcile accounting differences over time, you must be an excellent record keeper. It’s also important to send all the payment copies to your debt counsellor in case you lose yours (don’t forget to keep backup copies as well).
- There is always a possibility of you making a mistake. In that case, you will need to take full responsibility and handle extra-legal actions that may result from short payment.
- When paying your debt, remember to pay any debt review fees that appear on your payment schedule.
Paying via your debt counsellor
With this option, your debt counsellor handles everything for you.
You will save yourself the stress and worry of keeping track every month because they will take care of it for you.
This includes keeping monthly records of each payment, reporting to you on your distribution, and avoiding any mistakes or oversight.
And to add even more peace of mind, PDAs carry insurance that helps take care of any unexpected issues. So you won’t be held accountable for something that isn’t your fault.
The selected PDA must be an NCR-registered Payment Distribution Agent. The latter are the only ones recognized by the NCA.
Keep in mind that by choosing a payment service provider, you will be expected to pay monthly fees for their services. In other words, you will pay a small amount to earn valuable effort and time.
Struggling to keep up with your debt?
Our team can help make your debt affordable once again.
We help thousands of South Africans to reduce their monthly debt repayments, protect them from legal action, and keep their assets — our team can help you too.
See if you qualify
Things to consider
Can I pay extra money for my debt review?
Yes, you can. In fact, it is a good way to speed up your Debt Review program and to get out of debt fast. Just make sure to speak with your debt counsellor, and they will make the right arrangements for you.
What happens if I can’t pay my debt review?
There are months when we all face challenging financial issues, which may prevent us from paying. However, we highly recommend NOT missing a payment.
If you miss a month, you will be breaking the legal agreement that the court order has granted you. Which could put you at risk of forfeiting the benefits of debt review.
Instead, you can talk to your debt counsellor and settle on paying something rather than nothing. Plus, they will take your current financial situation into consideration and ask for negotiation with your creditors.
Final Thoughts
Now that you know you can choose to pay your creditors directly while under debt review and are aware of your options make sure to choose the option that fits your situation best.
Paying your debt yourself might seem more appealing, but remember that Debt Review is there to protect you and your assets. Providing you with solutions to any future issues that may arise.
My Debt Hero can help.
