Debt Counselling is the process, in which a Debt Counsellor assists consumers, who are not able to meet all their monthly debt obligations through:

• the restructuring of his/her debt obligations
• negotiating with creditors on behalf of the consumer
• providing budgeting advice

Debt Counselling is:

• NOT Debt Administration
• NOT Debt Collecting
• NOT Permanent ( see below – The Process #6 )

Legal Action and Repossessions

As soon as a consumer applies for Debt Review, his/her creditors cannot proceed with legal action or repossess goods purchased under a credit agreement. The timing and other conditions are relevant here. A consumer in this position should consult a Debt Counsellor urgently for guidance on this matter.

The Process

1. A consumer who thinks he/she is over-indebted can apply directly to a Debt Counsellor for Debt Review or he/she could be referred to a Debt Counsellor by a court or a creditor.

2. After the Debt Counsellor interviews the consumer and obtains the required documentation from the consumer, he/she (Debt Counsellor) informs the consumer’s creditors and credit bureaux that the consumer has applied for Debt Review. “Legal Protection” under the National Credit Act (NCA) becomes effective.

3. Creditors are required to provide the Debt Counsellor with the necessary information on the consumer’s accounts. Once this information is received, the Debt Counsellor can make an assessment as to whether the consumer is over-indebted.

4. If the consumer is over-indebted and the Debt Counsellor accepts the application, the (Debt Counsellor) compiles a restructured payment proposal to the creditors.

5. Once the process of negotiation with creditors is completed, court order which ratifies the new agreement, is obtained.

6. Once the consumer is no longer over-indebted, the Debt Counsellor must issue a Clearance Certificate. The consumer’s credit bureau record will then be cleared (Debt Review notification will be removed) and the consumer will be able to obtain credit again.