Debt review vs own arrangements with creditors

A Fin24 user wants to know if it is advisable to cancel debt review and deal directly with creditors. She writes:

Is it advisable to cancel debt review and make own arrangements with creditors?

Wikus Olivier, a debt counsellor at DebtSafe, responds:

Depending on the situation, I would not advise cancelling your debt review.

By cancelling your debt review you will cause the accounts to revert back to the original interest rates and other contractual terms.

By cancelling the debt review, credit providers will also be able to institute legal action against you in order to recover any arrears.

If your reason for wanting to cancel is simply because of poor service from your debt counsellor, I would rather recommend that you transfer to a new debt counsellor.

If your reason for wanting to cancel is because you don’t want to be in the process any longer, I would suggest that you be careful not to cancel prematurely.

Make sure that you bring your arrears up to date first and make 100% sure that you will be able to afford the original instalments and terms.

The aim is to get to a point of rehabilitation.

This point of rehabilitation can be when you have caught up all the arrears or when all your debt has been settled through the debt review.

Only by reaching this point of rehabilitation will you be able to get a clearance certificate that will restore your credit record.

By exiting prematurely, a clearance certificate cannot be issued and this will adversely affect your credit profile.
 
Like I said, if you cancel your debt review there is nothing that protects you any longer. Make sure that your matters are in place properly before you go ahead and withdraw from a debt review.

- Fin24

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