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Empowering Financial Freedom: A Guide to Debt Counselling and Debt Review

 

Debt Counselling, also referred to as debt review, provides a valuable solution for individuals burdened with excessive debt and facing challenges in meeting their monthly payments. If you find yourself struggling to manage your debts, Debt Counselling offers a structured and supportive process to help you regain financial stability. Here’s how Debt Counselling can assist you:

1. Application Process: To begin the Debt Counselling journey, you need to approach a registered Debt Counsellor (DC) and provide them with your relevant financial information. If you are married in community of property (COP), both you and your spouse must agree to the application.

2. Informing Credit Providers and Credit Bureaus: The Debt Counsellor takes the responsibility of notifying your credit providers and credit bureaus about your intention to undergo debt counselling.

3. Assessment Process: The Debt Counsellor conducts a thorough examination of your financial situation to determine if you are genuinely over-indebted and in need of assistance. Once the assessment is complete, all involved parties are informed of the outcome.

4. Negotiation Process: If the assessment confirms that you are over-indebted, the Debt Counsellor collaborates with your credit providers to develop a feasible plan aimed at reducing your payments and restructuring your debts. This plan must be agreed upon by all parties and is then submitted for approval to the National Consumer Tribunal (NCT) or the Magistrate Court, depending on the outcome of the negotiation.

5. Restructuring Process: Upon approval, the credit providers modify your credit agreements according to the agreed-upon plan, providing you with a more manageable and structured repayment schedule.

6. Payment Process: As directed by the Debt Counsellor, you must make the agreed-upon payments. You can choose to pay the credit providers directly or utilize a Payment Distribution Agent (PDA) approved by the National Credit Regulator (NCR) for added convenience.

7. Clearance Certificate Process: Once all debts covered by the debt restructuring plan are fully paid off, you become eligible to exit the debt counselling program and receive a clearance certificate. This certificate signifies that the debt counselling flag is removed from your credit profile, improving your creditworthiness.