Understanding the Debt Review Process in South Africa:
The Debt Counselling Process is also known as Debt Mediation, Debt Consolidation, and Debt Review, although debt mediation and debt consolidation are both different processes. These processes are very closely related, and, in a sense, very similar.
Similarities
For instance, all are legal processes that've been established by the
National Credit Act (NCA) and closely monitored by the National Credit Regulator (NCR).
For the purpose of this article, we are going to focus on the Debt Counselling Process in South Africa.
THE DEBT REVIEW PROCESS CONSIST OF SEVEN KEY STEPS:1. Debt Review Process in South Africa Starts with an evaluation first:
An
NCR-accredited registered Debt Counsellor will evaluate your financial situation, which includes your basic needs to survive as well as your debts. In essence, it is a summary of your income and expenses, like a budget, followed by an assessment of your debt profile.
The debt counsellor will ascertain whether you’re eligible for the Debt Review Process in South Africa and provide you with a minimum consolidated monthly instalment, which will include their fees and disbursement to bring the application as well as the aftercare fee for the debt counsellors’ services regarding the debt review process.
1 x consolidated monthly instalment consists of the following:
Bear in mind that the below mentioned is compulsory, and not any of these can be removed to decrease the monthly instalment, even if you have credit life insurance and funeral cover of your own.
a). Newly decreased monthly instalments towards the creditors
b). Debt Counsellors’ Fee and Disbursements for the Debt Review Application.
c). Credit life insurance.
d). Funeral Cover.
If you’re happy with the evaluation and the newly calculated decreased instalment, you will receive a FORM 16 document from the debt counsellor. The FORM 16 can be signed electronically, and once signed, the Debt Review Process, in South Africa will commence.
2. The Debt Review Application:a) The actual Debt Review Application can be done by either a qualified attorney or the debt counsellor.
b) The Debt Review Application can be done in the Magistrate Court or via a Tribunal.
c) Before the Debt Review application goes to court, there’s a lot of work to be done by the Debt Counsellor.
What is the next step, once the FORM 16 has been signed and accepted?
After the Form 16’s been signed, the Debt Counsellor will contact the creditors and inform them that you’ve officially started with the Debt Review Process in South Africa.
Notice to the creditors about the Debt Counselling Process in South Africa
Once they receive notice about the Debt Counselling Process in South Africa, the Debt Counsellor will start with the negotiations, to decrease the monthly repayments towards the creditors in terms of the accepted
FORM 16 evaluation and affordability of the client.
Acceptance letters after negotiations
Once the Debt Counsellor receive acceptance letters from all the creditors, the final instalment will be calculated, in most instances, it will stay the same, but dependent on the veracity of the decrease in instalments, it can be more than the actual FORM 16 quotation that’s been signed during the evaluation.
Can the monthly instalment quote on the FORM 16 change during the negotiation process?
Yes, it can change. Normally, if the saving is around 50% or less, the instalment should stay approximately the same, if the monthly saving towards the debt is more than 50%, the chances of the quoted monthly instalment being more after negotiations are finalized are great.
The Court Order
Now that you’ve got the final instalment and acceptance letters, the application can go to court.
3. Repayment
a) Debit Order: 
