Voluntary Surrender of Estate vs Debt Review
When struggling with debt, the solutions available tend to crowd our mind along with doubts on which company can be trusted to help you and which can’t. Two common solutions to over-indebtedness are Voluntary Surrender of Estate and Debt Review. Which process should you choose?
What is Debt Review?
This is the process whereby a person suffering from debt applies to have his/her finances restructured in order to ensure that he/she has sufficient, normal living expenses. Payments to creditors are also revised to be affordable.
What is Voluntary Surrender of Estate?
This is the process whereby an over-indebted person applies to commit to a repayment arrangement of 22c to each Rand owed between a term of 11 and 23 months.
Advantages of Debt Review and Voluntary Surrender of Estate
| Debt Review | Voluntary Surrender of Estate |
| Pay one fixed monthly payment. | All your debt will be written off after having paid a monthly instalment while your salary and other income will remain yours. |
| Once you are registered for debt review, you do not have to personally deal with your creditors anymore. | You will be able to stay in your house for 6 months or longer without paying the bond. |
| You will not be blacklisted. | You will not be required to pay any of your creditors after starting the process. |
| Once your application has been approved, none of your valuable assets may be repossessed or sold. | Your salary cannot be attached or garnished and all existing garnishee orders must be cancelled. |
| Your budget is restructured to your needs. | After publication of your Notice of Surrender, all legal action is stayed and no attachment can take place. |
| The consolidated instalment may be less than the combined original instalments. | Only your creditors will be notified of the process, not your employer. |
Debt Review vs Voluntary Surrender of Estate
| Debt Review | Voluntary Surrender of Estate | |
| Does the process take long? | This process can last for years depending on the amount of debt you are under. | Takes anything between 11 and 23 months. |
| How will you pay back the debt owed? | A set monthly repayment. | 22c to each rand owed in a form of a monthly instalment. |
| Do you have to deal with creditors? | No. | No. |
| Do you have to appear in Court? | It depends under which plan you are. | No. Someone will represent you. |
| How long will it take for you to be declared credit worthy again? | It could take years if ever. | After 4 years you may apply to the Court for a Rehabilitation Order subject that the insolvency state has been confirmed by the master, your credit status will be declared credit worthy. |
| Will I lose my house or car? | No. | No. |
| Does the changing interest rate affect the amount you have to pay back? | Yes | No |
While both Debt Review and Voluntary Surrender of Estate come with its advantages and disadvantages, your main focus should be your debt situation and Senator Counsellors can help you. While we do handle Debt Review cases we would urge you to consider Voluntary Surrender of Estate as it is the fastest and most reliable cure for over-indebtedness.
Unsure on which process to follow? Contact Senator Counsellors on 012 654 0107 or send an email to fin@senatorgroup.co.za for a consultation and let’s work together to clear you of your debt.
