Many people are not aware that they have recourse should they fall in arrears with their debt repayment or get blacklisted. Should you feel you are over-indebted, or you have received a Section 129 notice, you should contact a debt counsellor without delay.

Process of debt review

Once you have made contact with a debt counsellor, you provide the debt counsellor with statements from all your credit agreements. You then complete a Form 16, which is an application for debt review. Within five working days of receiving the application, your debt counsellor has to notify all relevant credit providers and credit bureaus that you are under debt review.

Within 30 working days of receiving the application for debt review, your debt counsellor has to determine whether you are over-indebted or not, and inform all relevant credit providers of the outcome of the assessment.

When over-indebted

If it is found that you are over-indebted, the debt counsellor then looks for reckless lending and unlawful agreements and provisions as provided for in the National Credit Act (NCA). Once your debt counsellor is satisfied that all is in order, he or she draws up a restructure proposal, where available funds are proportionately distributed among the various creditors.

This proposal gets sent to the creditors within 60 days of receipt of application for debt review. If all creditors consent to the proposal, a consent order is drawn up and made an order of the court. Should one or more creditors dispute the proposal, the Magistrate’s Court can be approached, and the matter can be heard and decided upon by a magistrate.

Once the consent order has been made an order of the court, you pay only one amount to a National Payment Distribution Agency, which will then pay the various creditors on your behalf.

You remain under debt counselling until all your debts have been cleared, at which time you are issued with a clearance certificate and your name is removed from the credit bureaus. For the duration of the process, the counsellor has to provide an after-care service and keep in touch with you to find out how you are doing.

This process is designed to help consumers, without prejudicing credit providers, but it is a very fast process with no time to waste. It is therefore advisable that you have all your documentation relating to your credit agreements in order before you sign the application for debt review.

Our Employee Wellbeing Programme (EAP) is available 24 hours a day if you want to find out how to get out of debt.