When applying for debt review, you will fill out an application form, called a F16, which you submit together with a copy of your ID, payslip, latest bank statements and all your credit agreements to your debt counsellor.
STEP 2
Together the debt counsellor and client will work out a budget according to the clients cost of living expenses(food, transport,school fees etc) and do an analysis of the consumer’s finances. The balance of the budget will be allocated towards debt repayments. At this stage the Debt Counsellor will also provide you with details of all the costs involved.
STEP 3
With the balances provided the debt counsellor does an assessment to assess whether you are over-indebted and whether your creditors were reckless in granting you credit.
During the first 60 business days from the date of your application, legal action may not be taken against you in respect of debts that are “under review”.
STEP 4
Once your debt counsellor find the client over-indebted and legally eligible for debt counselling, your creditors must be notified by sending them a F17.2 to confirm your over-indebtedness.
STEP 5
The Debt Counsellor works out an appropriate repayment plan to rearrange your debt obligations in line with what you can afford from your budget. This is presented to the creditor for approval. These negotiations affect the payment terms and interest rate in order to fit these repayments into the revised budget.
STEP 6
When Credit Providers accept the proposed debt repayment plan, it will be made an order of the court by the local Magistrate's Court or Tribunal, refered to as a "Consent Order".
STEP 7
An annual review is done.
Once the client has repaid all his debt, a clearance certificate is issued and credit bureaus are notified of your new status.
