{"id":63,"asset_id":"186","title":"Debt Counselling","alias":"debt-counselling","introtext":"<p><strong>Mandate of the debt counselling department<\/strong><\/p>\r\n<p>The mandate of the Debt Counselling Department is to monitor compliance of Debt Counsellors, Credit Providers\u2019 debt counselling departments and Payment Distribution Agents (PDAs) with the provisions of the National Credit Act as amended (NCA) and their conditions of registration.<\/p>\r\n<p><strong>What is debt counselling? <\/strong><\/p>\r\n<ul>\r\n<li>Debt Counselling which is also referred to as debt review, is a debt relief measure which is provided for in the NCA, to assist over-indebted consumers struggling to pay their debts on a monthly basis.<\/li>\r\n<li>To determine the over-indebtedness and how consumers can be assisted, an assessment of the consumer\u2019s financial position is conducted by comparing the income of the consumer against the basic expenses and debt obligations of the consumer.<\/li>\r\n<li>If the consumer is found to be over-indebted, negotiations with credit providers for reduced payments and restructuring of the debts will commence guided by the available income from the assessment of the consumer\u2019s financial position.<\/li>\r\n<li>Finally, the restructuring of the debts must be confirmed by the Magistrate Court or the National Consumer Tribunal(NCT) through a court order or consent order.<\/li>\r\n<\/ul>\r\n<p><strong>Who conducts debt counselling? <\/strong><\/p>\r\n<ul>\r\n<li>Debt counselling is conducted by a Debt Counsellor (DC) who is registered with the NCR. Upon registration, the DC is provided with a registration certificate which he\/she should display at his\/her place of practice and can be requested for inspection by the consumer if not displayed.<\/li>\r\n<li>The DC has an obligation to explain the debt counselling process, disclose the applicable fees in writing and consequences of being under debt counselling to the consumer in detail to ensure that the consumer makes an informed decision.<\/li>\r\n<\/ul>\r\n<p><strong>The debt counselling process<\/strong><\/p>\r\n<p><strong>Application Process<\/strong><\/p>\r\n<ul>\r\n<li>A consumer with the assistance of a DC, will voluntarily apply for debt counselling by completing an application named Form 16 and submitting relevant documentation;<\/li>\r\n<li>A DC will inform applicable credit providers and credit bureaus of the debt counselling application by issuing a Form 17.1 within five (5) business days of accepting the application from a consumer;<\/li>\r\n<li>The applicable credit providers will send the DC the latest financial information on that particular credit agreement in a form of what is referred to as a Certificate of Balance(COB) within five (5) business days of receiving the notification for debt counselling application (Form 17.1).<\/li>\r\n<li>A credit bureau will place a debt counselling flag on the consumer\u2019s credit profile. This flag is not a negative listing or \u201cBlacklisting\u201d as mostly referred to, it is just an indicator that the consumer is under debt counselling.<\/li>\r\n<\/ul>\r\n<p><strong>Assessment process<\/strong><\/p>\r\n<ul>\r\n<li>A DC will upon receipt on a COB conduct an assessment to determine if the consumer is over-indebted and arrive at the disposable income (amount available) to repay debt within thirty 30 business days of application;<\/li>\r\n<li>After the assessment, the DC will either reject the application (if consumer not found to be over-indebted) or accept (if consumer found to be over-indebted) and communicate the outcomes with the consumer, credit providers and credit bureaus by means of a Form 17.2.<\/li>\r\n<\/ul>\r\n<p><strong>Negotiation process<\/strong><\/p>\r\n<ul>\r\n<li>If your application is accepted, the DC will work out reduced payments for you based on the disposable income and make a proposal to your creditor providers;<\/li>\r\n<li>If all credit providers accept the proposal for reduced payments, the DC will refer the matter to the NCT for a consent order;<\/li>\r\n<li>If one or more creditor providers decline the proposal for reduced payments, the DC will refer the matter to the Magistrate Court for a decision;<\/li>\r\n<li>If the Magistrate Court grants the court order, the DC will send the court order to the consumer and all applicable credit providers.<\/li>\r\n<\/ul>\r\n<p><strong>Restructuring process<\/strong><\/p>\r\n<ul>\r\n<li>Upon receipt of the consent order from the NCT or the court order from the Magistrate Court, the credit provider will restructure the credit agreements in alignment with terms of the court\/consent order.<\/li>\r\n<\/ul>\r\n<p><strong>Payment process<\/strong><\/p>\r\n<ul>\r\n<li>A consumer has a responsibility to make payments as advised by the DC from the initiation of the debt counselling process. Debt counselling does not offer any payment holiday; however, the DC will advise on how interim payments can be made;<\/li>\r\n<li>A consumer who is under debt counselling can make payments directly to his\/her credit providers; or<\/li>\r\n<li>Make use of a Payment Distribution Agent(PDA) registered with the NCR to make payments.<\/li>\r\n<li>A PDA is an entity registered by the NCR to collect and distribute debt counselling payments to credit providers on behalf of the consumer under debt counselling.<\/li>\r\n<\/ul>\r\n<p><strong>Clearance certificate process<\/strong><\/p>\r\n<ul>\r\n<li>When all debts have been paid up and a DC has verified that, a DC will issue a clearance certificate and inform the credit bureaus to remove the debt counselling flag and expunge all information relating to consumer\u2019s debts which were under debt counselling.<\/li>\r\n<\/ul>\r\n<p><strong>Applicable debt counselling fees<\/strong><\/p>\r\n<ul>\r\n<li>The debt counselling service is not offered for free and there are fees applicable. Please click on this link to view the applicable <a href=\"documents\/debt counselling fee structure guideline.pdf\">fees<\/a><\/li>\r\n<\/ul>\r\n<p><strong>Important to note on the debt counselling process<\/strong><\/p>\r\n<ul>\r\n<li>In terms of the NCA, the debt counselling process (i.e. the application, the negotiation process and the referral process to the Magistrates Court or the NCT) has to be completed within a period of 60 business days from application. Within this period, the consumer is protected against legal action (e.g. letter of demand, summons, repossession of assets, default judgment and others) from the credit providers.<\/li>\r\n<li>There are prescribed forms that must be used by the debt counsellor to facilitate the debt counselling process. These forms must always be signed and dated by the relevant parties.<\/li>\r\n<li>When a consumer applies for debt counselling, a debt counselling flag is placed on the consumer\u2019s credit profile at the credit bureaus. This flag is not a negative listing or \u201cBlacklisting\u201d as mostly referred to, it is just an indicator that the consumer is under debt counselling.<\/li>\r\n<li>A consumer who is under debt counselling cannot apply for further credit.<\/li>\r\n<li>Reduced payments to credit providers must be made regularly by the consumer under debt counselling.<\/li>\r\n<li>If a consumer defaults on payment whilst under debt counselling, the credit provider can terminate the debt counselling application and enforce legal steps against the consumer.<\/li>\r\n<li>Once all debts have been paid up, a consumer will be issued a clearance certificate by the DC. The credit bureaus will remove the debt counselling indicator on the consumer\u2019s credit bureau profile and records of accounts which were under debt counselling.<\/li>\r\n<li>There are applicable\u00a0fees when you apply for debt counselling. <a href=\"documents\/debt counselling fee structure guideline.pdf\">Click here to view the fees<\/a>.<\/li>\r\n<\/ul>","fulltext":"","state":1,"catid":"31","created":"2019-06-06 09:53:22","created_by":"915","created_by_alias":"","modified":"2020-07-14 10:12:02","modified_by":"915","checked_out":"915","checked_out_time":"2020-07-14 10:11:17","publish_up":"2019-06-06 09:53:22","publish_down":"0000-00-00 00:00:00","images":"{\"image_intro\":\"\",\"float_intro\":\"\",\"image_intro_alt\":\"\",\"image_intro_caption\":\"\",\"image_fulltext\":\"\",\"float_fulltext\":\"\",\"image_fulltext_alt\":\"\",\"image_fulltext_caption\":\"\"}","urls":"{\"urla\":false,\"urlatext\":\"\",\"targeta\":\"\",\"urlb\":false,\"urlbtext\":\"\",\"targetb\":\"\",\"urlc\":false,\"urlctext\":\"\",\"targetc\":\"\"}","attribs":"{\"article_layout\":\"\",\"show_title\":\"\",\"link_titles\":\"\",\"show_tags\":\"\",\"show_intro\":\"\",\"info_block_position\":\"\",\"info_block_show_title\":\"\",\"show_category\":\"\",\"link_category\":\"\",\"show_parent_category\":\"\",\"link_parent_category\":\"\",\"show_associations\":\"\",\"show_author\":\"\",\"link_author\":\"\",\"show_create_date\":\"\",\"show_modify_date\":\"\",\"show_publish_date\":\"\",\"show_item_navigation\":\"\",\"show_icons\":\"\",\"show_print_icon\":\"\",\"show_email_icon\":\"\",\"show_vote\":\"\",\"show_hits\":\"\",\"show_noauth\":\"\",\"urls_position\":\"\",\"alternative_readmore\":\"\",\"article_page_title\":\"\",\"show_publishing_options\":\"\",\"show_article_options\":\"\",\"show_urls_images_backend\":\"\",\"show_urls_images_frontend\":\"\"}","version":7,"ordering":"0","metakey":"","metadesc":"","access":"1","hits":"102","metadata":"{\"robots\":\"\",\"author\":\"\",\"rights\":\"\",\"xreference\":\"\"}","featured":"0","language":"*","xreference":""}