The counselling process has six easy phases, and this process if adhered to will result in a debt free consumer:
Phase One: The applicant supplies the debt counsellor with details relating to monthly income, monthly budget as well as debt repayments.
Phase Two: The debt counsellor will then conduct an assessment in terms of the applicant's indebtedness. The applicants will have to supply copies of their ID, payslip, bank statement and creditor statements.
Phase Three: During the consultation the debt counsellor will verify these and draw a revised budget which determines the amount available to pay to creditors. After this the official application for debt review will begin.
Phase Four: The applicant starts paying a reduced and affordable payment, based on the interim payment schedule. The amount is paid to a Payment Distribution Agency, as per NCR regulations. The debt counsellor starts negotiating proposals to all the applicant's credit providers immediately.
Phase Five: Should the credit providers accept the proposals, a consent order is obtained from a Magistrates Court. Should a credit provider not accept the proposal, a proposal will be submitted to a Magistrate for decision.
Phase six: The debt counsellor provides applicant with a final repayment plan, of which a copy is also submitted to credit providers and the payment distribution agency. The goal is to collect a single payment from applicant on a monthly basis and ensure that the correct amount is paid to all credit providers. This process will end once all outstanding debt has been settled. After that the applicant is given a debt clearance certificate, stating that they are no longer under debt review and are debt free.
Article written by: Andrea van Tonder 02-2013