The Debt Review process is not as complicated as many imagine. Below shows the exact steps involved in the Debt Review Process. From applying to becoming Debt Free.
Before you apply for debt review, your assigned portfolio manager takes a look at your current financial position, we work out your gross income – your living expenses and then review your debt exposure. If you are over-indebted, we start the process of Debt Review only if this is the best solution for your current situation.
Once your assigned portfolio manager has had a look at the basics, we will send you a formal application called a Form 16. This Form collects all your personal information, income, expenses, creditor information and all your debt information, such as bond accounts, vehicle finance agreements, loan agreements, clothing accounts and more.
Once you have signed the Form 16 we will send a notice known as a Form 17.1 to all your creditors. This notice informs all your creditors that you have currently applied for debt review and your current financial situation is being assessed by our registered debt counsellor. This notice further requests your credit providers to issue your Debt Counsellor with a Certificate of Balance also known as a COB.
This COB is a summary of your contract with individual creditors and confirms the outstanding balance, interest rate, remaining term etc. of your credit agreement with them. During this phase of your Debt Review application, we will also list you on the National Credit Bureau’s NCR Debt Help system upon which you will be allocated an NCR number as confirmation that you have applied for debt review.
The NCR will then notify all credit bureaus that you have applied for debt review. This is to ensure you do not incur further credit whilst having applied for debt review. Before your portfolio manager proceeds to the next step you can still withdraw from the Debt Review process by submitting a written instruction to us stating your wish to withdraw.
Should we not receive a notice to withdraw, your portfolio manager will proceed with the next stage by submitting your file to our debt counsellor. This process again confirms that you are over-indebted, and we then issue a Form 17.2 (Acceptance) to all your creditors’ and then use the information provided on the COB to draft a repayment proposal to your credit providers.
Your Debt counsellor and Credit Providers will then negotiate the repayment terms of the payment proposal and should all credit providers consent to the proposal, the matter will then be referred to the National Consumer Tribunal or Magistrate’s Court for a Consent Order.
If your debt counsellor determines that you are not over-indebted or eligible for debt counselling, he or she must reject your application and send a Form 17.2 (Rejection) to all your creditors’ and the credit bureaus, marking the paragraph that confirms that you are not over-indebted.
You then start paying your debt review instalments from the same month you joined. Meaning you no longer have to pay your credit providers the contractual instalments. All Debt Review payments are made to a Payment Distribution Agent (PDA).
In terms of the National Credit Act, your Debt counsellor must contract a registered PDA in order to distribute the payments of its clients to the relevant Credit Providers. The PDA will distribute the funds to your creditors until you have settled all your debt.
You will receive monthly statements, showing you how the funds were distributed and balances outstanding, so you are kept in the loop every step of the way.
Before you visit us you will need to gather together the following documents:
A Copy of your identity document or passport. (Compulsory)
The last three months bank statements for all your bank/investment accounts. (Compulsory)
A copy of your most recent salary/wage slip. (Compulsory)
Marriage certificate (If Applicable)
Frequently Asked Questions
- Assess the full extent of your debt situation
- Assess your assets that may be taken into account
- Provide a debt remedy that:
- Provide you with an acceptable standard of living while repaying your debts according to your affordability – this includes retaining the home and a vehicle where possible;
- Provide you with an agreed, affordable and realistic monthly budget in order to resolve the situation in the shortest possible time;
- Provide a repayment scheme acceptable to your creditors and confirmed by the Court;
- Prevent repossession of assets where possible;
- Rehabilitate you without detriment for the future; and
- Allow you to get on with your life.
- To work honestly and openly with the debt counsellor;
- Declare all assets and liabilities – including all incomes and debts, and including bonuses and salary increases;
- To pay the associated fees as disclosed at the first meeting;
- To adhere to the agreed instalments and to pay these at the agreed dates;
- To keep in regular contact with the debt counsellor for the full length of the agreement;
- To work with the debt counsellor to assist in the normalisation of the debt;
- To favourably consider the repayment proposal;
- To ensure the consumer is assisted in a fair and unbiased way throughout the process of repayment;
- To assist the consumer to rehabilitate as soon as possible and to assist the consumer to restore his/her credit worthiness as soon as possible.
Most definitely, once you’ve settled all debt, you will be issued with a Clearance Certificate. Then you will be entitled to apply for credit. As per question one, all records of debt review will be cleared from your credit bureau profile.
In terms of Section 86(10) of the NCA, should a consumer default on their debt review payment the credit provider may then terminate the debt review and proceed with legal action against the consumer. The instalment needs to be maintained in order to enjoy the protection from legal action the debt review process offers consumers.
This differs from one individual to the next. Prior to drafting a proposal for your creditors, we assess your monthly income, living expenses and total outstanding debt. Based on the aforementioned we draft a budget and calculate your monthly instalment payable to creditors. The repayment term depends on the instalment a client is comfortable with versus their total debt.
We provide for life insurance policies and retirement annuities in your budget within reason. It should be clear that you are not intending to enrich your estate to the detriment of your credit providers so a balance must be kept.
All insurance policies linked to credit agreements have to remain in place. For instance should your vehicle be financed, the contract states that the vehicle must be insured at all times.
It’s simple; you offer what you can afford to pay according to your reasonable budget. Should we fail to come to an agreement with a credit provider, the matter will be referred to the Magistrates Court, where a Magistrate will rule on the application.
No. All accounts are to be included in your application. Except whereby legal action has been instituted prior to your application for Debt review.
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