Posts Tagged ‘debt review’
Debt Counselling Help for the Over Indebted
Many people are feeling the pinch in the current economic climate, so don’t feel alone. With the current global economic crisis dominating the financial world, many people, if not all, are feeling under pressure. There is something you can do about your financial position however. There is debt counselling to help you with your debt situation and get you on your way to financial freedom again.
So what, you might ask, is debt counselling? Well, to put it straight to you, debt counselling is a professional service provided to those who are over-indebted, guiding the consumer to develop healthy financial habits whilst paying off all outstanding debt with more affordable payments each month. The main goal of debt counselling is to create a repayment plan for the consumer in order for a person to pay off all debt in an affordable manner which all the consumer’s creditors will be satisfied with. That way the over indebt individual will not get a summons by creditor and creditor will not have to write off any bad debt.
If you are seeking the assistance of a debt counsellor, begin by selecting one who has been accredited by South Africa’s National Credit Act (NCA). Once you are certain that you’ve chosen the correct debt counsellor, be sure to provide the debt counsellor with all the necessary documents, compiled and completed, that he might require.
The debt counsellor will determine your over indebtedness during your debt counselling session and then prepare an proposal that will be negotiated to your creditors as a starting point of the negotiations with your creditors. Once all the creditors involved are satisfied, the payment plan will be implemented and to ensure that it is followed through, regular reviews will be scheduled with your debt counsellor.
If you are struggling to keep afloat financially in these trying times, contact a debt counsellor for an in-depth evaluation on your current financial position. With the help from trained debt counsellor you will learn to enjoy the freedom that comes with a debt-free life by starting and applying for debt counselling!
What are the Steps in the Debt Review Process?
The National Credit Act (NCA) came into effect in June 2007 and with it came the process of Debt Review or Debt Counselling.
The consumer applies for debt review at the debt counsellor or consultant. The consumer must know the debt review process and the fees that go with Debt Councelling. Debt review will influence the consumer’s credit rating, but this is temporary while the consumer is in debt review. The consumer can opt-out of debt review at any time.
The fees must be explained to the consumer so that he or she knows the cost. Debt counselling is not cheap and can be expensive, but is far better than losing your house or car to the sheriff’s auction. In the current economic market you will only get halve of the value of your car or house price at an auction.
The consumer completes and signs a debt review application form after consultation with debt counsellor or consultant. The form is called a Form 16. Form 16 together with supporting documents is handed over to the debt counsellor or consultant. The form 16 must be completed with all details. All personal details must be entered as well as a budget will all details.
The budget is very important to the debt counsellor to determine if the customer is over indebt or not. Supporting documents are necessary to confirm account name, account number, address and creditor details with amount outstanding and monthly instalments.
The details on the form 16 are captured immediately. Within 5 days (normally sooner) all creditors are notified with form 17.1 that consumers is applying for debt review. The debt counselling application is now in progress. It is not possible for any creditor to take legal action now.
The debt review process takes 60 working days. The creditor has 5 business days to provide information on consumer. The debt counsellor will check the details he received from the consumer to see if the details are correct. The creditor is reminded to give feedback after five days.
Another 10 days grace is given to the creditor to reply to notice debt counsellor sent.
If the debt counsellor does not receive conformation from creditors, he may presume that the figure provided by consumer are correct. The debt counsellor will now determine if consumer is over in debt, in other words, is the consumer’s monthly expenses more than his or her monthly income.
The debt counsellor will now prepare a debt-restructuring proposal to the creditors. The proposal must be sent 25 days from date of application. All creditors have 10 days to respond. If there is no response, the creditors will get a reminder and another 5 days to respond.
The proposal will be sent to the Payment Distribution Agency to start the distribution to creditors. That is the debt review process in a nutshell.