Debt review and court judgments are often misunderstood, leading many consumers to make decisions based on incorrect information. If you’re struggling with debt or have concerns about legal action, it’s important to separate fact from fiction. Let’s clear up some of the most common misconceptions surrounding debt review and judgments.
Misconception 1: Debt Review and Judgments Are the Same Thing
Reality: Debt review is a legal process designed to help over-indebted consumers restructure their repayments and avoid judgments. A judgment, on the other hand, is a court order confirming that a creditor has the right to take legal action to recover outstanding debt. If you enter debt review early enough, you can often prevent a judgment from being granted against you.
Misconception 2: You Can’t Exit Debt Review Until All Debts Are Paid Off
Reality: While it is true that you must be declared no longer over-indebted before leaving debt review, you do not necessarily have to wait until all debts are paid in full. If you can prove financial stability and settle certain debts, you may apply for a court order declaring that you are no longer over-indebted. A de Bruyn Attorneys can assist in this process and guide you through the necessary steps, though the outcome will depend on individual circumstances and court approval.
Misconception 3: A Judgment Means You Lose Everything
Reality: A judgment does not automatically mean that your assets will be repossessed. However, it does give creditors the right to enforce collection measures such as garnishee orders (salary deductions) or asset attachments. If you act quickly—by either settling the debt or negotiating with creditors—you can prevent drastic consequences.
Misconception 4: You Can’t Get Credit Again After Debt Review
Reality: Once you successfully complete the debt review process and obtain a clearance certificate or a court order declaring you no longer over-indebted, you can rebuild your credit profile. Responsible financial management and timely repayments will improve your creditworthiness over time.
Misconception 5: Debt Review is a Scam or a Trap
Reality: Debt review is a regulated legal process under the National Credit Act, designed to protect consumers from reckless lending and financial ruin. However, choosing the right professionals to assist you is crucial. It is important to research a debt review company before fully committing to the process.
Final Thoughts
Understanding the truth about debt review and judgments empowers you to make informed financial decisions. If you’re considering debt review, facing legal action, or need help exiting the process, A de Bruyn Attorneys can guide you every step of the way.