Disadvantages of Debt Review​: Missing a Payment

Debt Review has many benefits, including reduced monthly payments and interest rates combined into one single monthly amount you can afford. This brings huge financial relief and you will also be protected from legal action and calls from credit providers. 

The one important fact you should know before going under Debt Review is that this is one payment you cannot afford to miss and say you’ll pay it next month, or not at all. 

Why you can’t miss a Debt Review payment

• Being under Debt Review is not a payment holiday. The process is designed to help you take care of your debt responsibilities so you have room to breathe to afford your daily living expenses.
• Legal action can be taken against you if you miss a Debt Review payment. It can also lead to the termination of your application with your Debt Counsellor. Remember, Debt Review is a legal process where a payment agreement has been reached with your creditors on your behalf. 

What happens after you miss a payment?

At Debt Freeze we understand that being in debt is stressful, which is why we will contact you several times to see if there is a way your Debt Counsellor can assist you. 

However, after 3 missed payments, Debt Freeze will have no other option but to suspend you as a client and inform your creditors that you have defaulted on your payments. 

You will be liable to make payment arrangements with your creditors outside of Debt Counselling. Debt Freeze will assist with clearing your name once all your creditors have been paid and paid-up letters have been received. 

Here is what will happen once Debt Freeze informs your creditors of your defaulted payments:

• Your creditors will end your debt review agreement, and revert to the initial terms of your credit agreement. Debt Freeze will not be able to protect you when this happens, and the full contractual payment instalment of your contract with them will still apply.
• You will be issued with a Section 129 letter. The purpose of this notice is to resolve any dispute under your credit agreement or develop and agree on a plan to bring the payments under the agreement up to date. You will have 10 days to respond to this notice. If you do not respond, your creditors can start taking legal action against you.
• After being served with a summons, you will need to appear before a magistrate in court. The court may order you to surrender your estate.
• Your car, if you have one, will be one of the first of your assets to be seized and sold at an auction to try and recover some of your debt. If you do not have a car or any other moveable assets, you will have to go back to court with proof of your income and expenses. The magistrate will then issue a court order on how you will have to pay back all your debt. 

The risks of missing a Debt Review payment are just not worth the added stress, paperwork, and constant calls from creditors harassing you for their money. 

Staying current with your payments helps ensure that your debts are managed effectively and increases your chances of achieving financial stability.