Process for Debt Relief in Detail | Detailed Debt Counselling
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Debt Counselling Process Explained in Detail

* Please note that if married ANC or you are single this will only apply to you as set down below. If married COP this will apply to yourself and your spouse and it is compulsory that both applies for debt review ,if only one applies the bank may hold your spouse liable for the other half of the bond should it be a joint bond. This is because you are jointly and severally liable for the bond.

* It is a legal process that has been made provision for in the National Credit Act to help consumers (people) with any financial problems.

* Benefits of debt counselling to a consumer is a reduced amount on each account installment and will be fixed installments up and till all debt is paid in full ,accept if their is an yearly increase on their debt then only will it increase. All payments to creditors will remain the same, installments on a monthly basis as to the interest rate will be fixed and not differ each month.(This is commonly used if you do not have enough funds available to offer towards your creditors on a monthly basis. It will be in rand value per year).

* All interest rates will be fixed on all debts up and till all accounts is paid in full. The creditors will provide the debt counselor with the interest rates that would be presented on the COB(Certificate Of Balance).

* Debt Review can only help you on your personal capacity and not business capacity except if the company is a soul proprietor(One man Business).

* If their is any accounts with a Sec129 letter ( Summons commencing action) that was not responded to within 10 working days by means of applying for debt review or bringing the account up to date with all arrears payments a debt counselor may not include it into debt counselling at all and needs to make provision for the account in your monthly budget to repay directly to that creditor.

* For the time period that all debt is being paid while under debt review the Consumer can not at all obtain any further credit until all debt is paid in full, however after all debt is paid the debt councilor must issue a clearance certificate to clear your name from ITC completely.

* Process on the debt councilor side is only 60 business days ,during that time a couple of things needs to be done for example: form 17.1 (This form informs all credit providers that the consumer has applied for debt counselling) needs to be sent to all credit providers to inform them that the clients has applied for debt review and that the debt counselor needs to be provided with a COB ( Certificate of Balance ). After the form 17.1 was send out 5 business days needs to pass, then the from 17.1 is send out again on the 10th day as a reminder to credit providers to provide the debt counselor with Cob and informing the credit provider the client is applying for debt review for in case they haven't received the first form 17.1 this can be seen as a courtesy reminder.

* On the 15th business day after client applied for debt counselling the Form 17.2 (This is a document stating that the debt counselor made a assessment in terms of over indebtness and found the consumer/client to be over indebted and continuing with the debt review process), needs to be send out to notify the credit provider that the client is over indebted and the debt counselor is continuing with the process of debt counselling. All the relevant credit bureaus will be informed as well of your application for debt review. Due to debt review you will be listed on the credit bureaus and no further credit can be obtained for this period.

* On the 20th business day the proposals is due to be send to credit provider to show them what the client is able to offer in terms of repayments. Take note that credit providers is only institutions that charges interest and not like a service provider that charges no interest. Only credit providers will receive a proposal as they will be included in debt review. Service Providers will be excluded from debt review, and provision will be made on the budget under basic essential needs. Take note the time period for repaying debts depends on how much is available after basic essential needs has been paid for. Under normal agreements and procedures the banks accepts all credit cards, personal loans, clothing and furniture accounts to be paid in full within 60 months. Vehicles are paid over 70 months and bonds over 350 months as maximum periods. This is the terms it will be extended from date of debt review application only should you not have enough to offer them per month.

* All of this is done by the debt counselor within the first month since the client has applied for debt counselling

* After the proposals is send out to the creditors, Creditors may and most likely will respond with a counter proposal to state that they are not happy with the proposed amount we are offering to them. When they respond with a counter proposal the debt counselor may accept the counter proposal or decline the proposed amount. It is highly recommended to accept the Counter Proposals for all vehicle and bond accounts, as the banks may terminate the debt review and continue with legal action. This is due to the new Supreme High Court ruling that was made in respect of debt review. ( This is applicable to any Debt Counselling Company ). Whatever discussion was made by consumers or debt counselors he/she must inform the credit providers of the decisions reached.

* Only if all credit providers give consent (Accepting the amounts offered) then the debt counselor do not have to take the case to court as normal proceedings at court. The debt counselor may ask the court for an order on grounds of the consent orders that was obtained by credit providers.

* However if only one creditor has not given consent the debt counselor must on behalf of the consumer proceed to take the debt review application to court within the 60 business days, the debt counselor has to complete his tasks. If the application was brought after 60 days the creditors has the right to terminate the debt review as well.

* The court process does not have a fixed time period an can vary on a couple of things for example: Postponed, Filing of opposing papers from creditors side, additional info required, ect. Court process can be a lot stricter and endure longer, depending on different Civil court districts. However the process will go a lot quicker if Counter Proposals has been accepted or some consent order was obtained.

* On the third month of the debt review the creditors must start receiving payments as arranged by the debt councilor (This is after the 60 days the application takes). If not the creditor has the right to terminate the debt review on grounds of default under debt review and may proceed to take legal action and proceedings in obtaining a judgment and will lead to repossession of assists. Normally the credit providers will send a registered letter and address it to Sec86(10) of the National Credit Act.

* If payments is made on a monthly basis the creditors may not proceed with legal action and the consumer will be save (depending on the counter offers or acceptances that was accepted by the consumer). If the debit order should fail for some odd reason it is the consumers obligation to make a direct payment to the appointed PDA that the debt counselor is using (Sa Debt Relief makes use of the NPDA that you can confirm with them on 0861 628 628).

* When the court order is granted on conditions of the magistrate the debt counselor is compelled to make the necessary changes if needed to the consumers debt review.