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In terms of the National Credit Act (NCA) you may formally apply to a Debt Counsellor for debt relief if you are unable
to meet your financial commitments under credit agreements on a monthly basis.
The Debt Counsellor must assess if you are over-indebted. The process is as follows:
Step 1
Provide details of your income, monthly budget and debt commitments to the Debt Counsellor. This can be achieved by
completing the input questionnaire and supply copies of payslip, ID and the latest statement
of all your debt.
Step 2
The Debt Counsellor will do an initial assessment. If the information indicates that you are over indebted then the Debt
Counsellor will set up a consultation with you. This could be a face to face
consultation or a telephone consultation.
Step 3
During the consultation the Debt Counsellor will verify your budget and your existing debt commitments.
A new budget will be agreed and the amount available for debt repayment will be determined. When this is
completed the Debt Counsellor will generate the official Debt Review application for your signature. The
Debt Counsellor will also provide you with details of all the costs as well as an interim repayment
plan.
Step 4
The Debt Counsellor will contact all your Credit Providers as well as the credit bureaus to verify your debt. On completion the Debt Counsellor will draw up proposals and submit this to all your Credit
Providers. The Debt Counsellor will where possible finalise the negotiations with all your Credit
providers.
Step 5
The Credit Providers may accept the proposals and if all of them do then a consent order will be
obtained from a magistrate court. If one or more of the Credit Providers does not accept the proposed
repayment plan the Debt Counsellor will submit a proposal to a magistrate for a decision.
Step 6
The Debt Counsellor will provide you with a final repayment plan and this repayment plan is also
submitted to a Payment Distribution Agency (PDA). The aim of this is to collect a single payment from
you and ensure that the correct amount is paid to all credit providers on a monthly basis. This will
continue until the debt has been repaid. The alternative to this arrangement is that you pay your
Creditors directly, which will entail more hassle but does save on the cost for the PDA’s service.
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