Five steps of Debt-Counselling
Step One: Finding a Debt Counsellor
- Must be registered with the NCR (National Credit Regulator)
- All legitimate Debt Counsellors have a registration number
- This Registration number can be confirmed with the NCR
Step two: Complete Form 16
- Information required:
- Income
- Statutory deductions
- Living expenses i.e. groceries, petrol, after care, phone, policies, school fees etc.
- List of all creditors i.e. home loans, credit cards, clothing accounts etc
- Documentation required
a) ID document, plus, if married, spouse’s ID.
b) Pay slip.
c) Creditors Statements.
Step three: The Debt Counsellors' Assessment
- With the above information the Debt Counsellor will do an assessment to determine if the consumer is over-indebted
- Debt-Counsellors make use of criteria set out by the NCR to determine over-indebtedness.
- Consumer qualifies for Debt Review
- Consumer must open a new bank account with an institution that he/she does not have an account with.
- Cancel all debit orders, move other service providers debt orders to the new bank account i.e. Cell Phone, insurance, Life Policy’s
- Pay salary into new bank account.
Step four: Debt Restructuring and Payment
- The over- indebted consumer must sign a consent document.
- This give the Debt-Counsellor permission to contact the credit providers on their behalf to gather information about the outstanding accounts
- Negotiations and restructuring process starts with all creditors.
- All credit providers accept the restructured proposal.
- Consumer receives and signs new payment proposal.
Payment of Creditors
- A Payment Distribution Agency ( PDA) appointed by the NCR, will distribute the monthly payments to creditors.
- One debit order to be made out to PDA. This will cover all agreed payments to creditors.
Step five: After Debt Management
- Once the consumer is clear of all debt or has been under debt review for a maximum of 5 years, a clearance certificate will be issued by the Debt Counsellor.
- Once a consumer has received a clearance certificate the credit bureau will expunge from its records:
- All arrear and default payments prior to and during the debt review process.
- Any record of debt review or arrangement.
A CLEAN SLATE AS A REWARD FOR THE RESPONSIBLE STEPS TAKEN.
