Debt Review in South Africa

What happens when you apply for debt review and debt counselling?

The National Credit Act protects you against any legal action when you are sinking in a sea of debt and don’t see any clear and logical solutions. If you can prove you are over indebted, you may apply for a debt review.

It is simply a matter of contacting a registered debt counsellor service and provide them with all your financial and applicable information.

The counsellor will assess your financial situation and if you qualify, a form F16 is completed and signed by you. Your credit providers will be notified of your application.

The credit bureaus are notified as soon as you apply for debt review and debt counselling. Your counsellor will notify them of the outcome of your application as well.

It is quite possible for your debt counsellor to prove that credit has been granted recklessly, when going through your affairs. Your case will be presented to the Magistrate’s court, and if the court finds credit provider guilty of negligence, the outstanding amount could even be written off.

The debt counsellor prepares a possible solution for your repayments, which will be negotiated with your credit providers. In some cases the credit providers are willing to extend the repayment period at lower installments.

When your application has been approved, your counsellor can arrange for you to pay one consolidated installment to a payment distribution agency. They will pay each creditor the agreed installment on your behalf.

During a period of debt review and debt counselling, your creditors are not allowed to take legal action, provided you keep to the arranged repayment schedule.

You won’t get access to any extra credit until all your debt has been repaid. After all your debt has been repaid, the debt counsellor will issue a clearance certificate which will be distributed to the credit bureaus.