DEBT REVIEW PROCESS - STEP BY STEP GUIDE 2019
If you’re ready to take your first step to pay off debt, debt review and debt counselling with us may be the perfect solution for you. Debt review is a service or product that helps consumers get out of debt. Depending on your situation, debt review and debt counselling may be the best way to assist you to get out of debt. Most individuals will repay their debt in three to five years. Others have managed to repay their debt in as little as a year.
HOW DEBT REVIEW AND DEBT COUNSELLING WORKS
Here’s how our debt review and debt counselling service offering can help you pay off your debt. First, you will work with our trained debt counsellors to check your financial situation. We will make a budget that you can live with while you pay down your debt.
You will pay all your debts with an affordable instalment. Instead of making monthly payments to multiple creditors, you’ll make one easy payment to our payment distribution agent. The PDA will pay your creditors on your behalf based on our restructured instructions.
This is important for these reasons:
- The easy management of your finances
- Helping you reduce stress
- Debt Counselling will make things easier to stay up to date payments.
- Reductions in interest rates, finance charges, late fees, and over-limit fees.
In this way, our debt review and debt counselling service can reduce the amount of money you owe and shorten the time it will take to pay your debt off. Please visit our debt counselling repayment calculator to get a rough estimate of the amount of time it will take you to repay your debt.
STEP BY STEP GUIDE OF DEBT REVIEW AND DEBT COUNSELLING
Find a debt counsellor to handle your debt counselling process.
South Africa, there are many options when it comes to choosing a debt counsellor. All debt counselling firms get regulated by the NCR and fees are set at a certain ceiling depending on the amount of debt. Find a reputable debt counsellor and investigate consumer complaints websites before signing up. We have helped hundreds of clients and we have a long list of customer testimonials. We work for your benefit and not for your credit provider.
Check if the debt counsellor is active and registered with the NCR
National Credit Act requires a Debt Counsellor to have a certain qualification and registered with the NCR. Debt counsellors are not allowed to provide debt counselling services if not registered. Making use of unregistered debt counsellors will cause harm and one might stand a chance in losing monies paid.
We are a compliant registered debt counsellor and have been in business since 2006.
Complete an application for debt review (FORM 16)
Once you are happy with your debt counsellor and you have investigated if the debt counselling firm is active and registered, the debt counsellor will provide you with an application form. You will need to complete this application in much detail as possible. This form is what we call From 16.
The debt counsellor will conduct an in-depth financial analysis of your finances. This analysis is to determine the extent of your debt and to investigate if you are over-indebted.
With the completed form 16 you need the following documents
- ID Copy
- Power of attorney
- Bank Statements
- Account statements (if you have this available)
- Salary advice slip/ payslips
The debt counsellor will use these documents to plan a suitable budget and plan a restructure proposal to pay off your debts. This restructured amount will make sure that enough money is available for living expenses.
Debt Counsellor will Assess if you are over-indebted
This is the process where a debt counsellor will check and determine if you are over-indebted and if you will qualify for debt counselling. During the process, the debt counsellor will investigate reckless lending.
The Debt counsellor has a period of 30 days to get all the necessary documents from the consumer and credit provider to make this determination.
Notifying the credit providers of your debt counselling or debt review application
Within 5 days of receiving your application for debt counselling, your debt counsellor will notify all your credit providers of your application. This notification is form 17.1
This 17.1 notification will request balances from your credit providers and the credit providers will issue statements in the form of a certificate of balance. COB
The COB will have the following information
- Name and Surname
- Credit providers’ details including registration number
- Account number
- Account type
- Outstanding balance
- Monthly instalment
- Interest rate
- Arrears amount
- Insurance amounts
With this detailed COB statement, the debt counsellor will be ready to propose your credit provider.
Debt Counsellor declares you over-indebted or not over-indebted
With your income, expenses and certificate of balances, the debt counsellor will either declare you over-indebted or not over-indebted
A Form 17.2 notification gets sent to all your credit providers advising them that your application for debt review was successful.
Your application for debt review get decline
If the debt counsellor believes that you are not over-indebted a Form 17.2 notification gets sent to all your credit providers advising them that your application for debt review was unsuccessful. If you are not over-indebted you will not be able to make use of the debt review or debt counselling process.
Your application for debt review gets approved and you get declared over-indebted
Once declared over-indebted the debt counsellor sends a proposal outlining the following information:
- Name of the Credit provider
- Account number
- Original instalment before debt review
- Original interest rate before debt review
- Proposed new restructured instalment
- Proposed new interest rate percentage
- Cascading of how the account will be repaid
- Number of months to repay the debt under debt counselling
The Credit providers will respond by accepting the proposal or they would issue a counter offer. This process takes 10 business days
Restructuring of your debts and a consent order
Within 60 days of receiving your application, the Debt counsellor will approach the courts to get a consent order.
Your credit providers will stop any legal action against you and you will enjoy protection for the first 60 working days
Paying your reduced instalment to a Payment Distribution Agent
You will pay your restructured amount to a payment Distribution agent who will distribute your restructured instalment as per the proposal and/ or court order
Please note that debt counsellors are NOT allowed to request any fees from you. You will pay your restructured instalment to our appointed payment distribution Agent (PDA)
You will now pay a reduced instalment until your debt gets paid off
Once you have settled all your debts under the debt counselling process the debt counsellor will issue you with a clearance certificate and will notify:
- All credit providers
- Credit bureau
- National Credit Regulator.
The debt counselling indicator will then get removed.