Debt Counselling is a formal legal process that provides for a consumer to be declared over indebted and for the Debt counselor to negotiate a restructured payment plan and obtain a court order confirming the new repayment plan. The Debt Counselor must be registered with the National Credit Regulator and have an NCRDC number. The NDMA uses the services of a registered debt counselor.
Once declared over indebted and accepted into Debt Counselling the following will happen:
• While under Debt Counselling you will be protected from legal action for a period of 60 days from the day of application and after the arrangement has been concluded as long as you pay according to the new arrangement;
• All your creditors will have to stop calling you and liaise with your debt counselor;
• You will be listed at the Credit Bureau as being under debt counselling;
For as long as you are under Debt Counselling you will not be allowed to get credit until you are issued with a Clearance Certificate once you have satisfied your obligations as per the Court or Tribunal order and in line with the National Credit Act.
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How Debt Counselling or Debt Review can work for you:
• 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.
The overall objectives for YOU should be:
• 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 registration and debt counselling fees as disclosed at the first meeting;
• To adhere to the agreed installments and to pay these at the agreed dates;
• To keep in regular contact with the debt counsellor for the full length of the agreement; and
• To agree and commit to the debt remedy – this may include surrendering credit cards, closing accounts and realising some assets.
The overall objectives for your CREDITORS should be:
• To work with the debt counsellor to assist in the normalization of the debt;
• To favorably 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.
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Yes – the service is not free, there are recommended fees laid down by the National Credit Regulator (NCR) and the fee guidelines are available from the NCR website at www.ncr.org.za.
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