If a consumer believes that he/she is over-indebted he/she has the right to apply to a debt counselor to have himself or herself declared over-
indebted. The purpose of debt review is to head off legal action to seek a negotiated settlement and to obtain a court order against the credit providers forcing them to accept a lesser installment and/or to extend the period of agreements. The
procedure provided for by the Act is as follows:
You (“the consumer”) apply to us (“the debt counselor”) to be declared over-indebted. Our debt counselors are qualified and registered in terms of the provisions of the Act. You will be required to complete a statutory form at our offices setting out all your financial information. We will verify this information with your creditors. We will thereupon in terms of the Act, make an assessment of your financial position. It is also possible to find that you are not over-indebted, but that you are experiencing financial difficulties. We will then make a proposal to your creditors to accept a lesser installment and/or to decrease interest and capital to enable you to pay everybody. Should we find that you are over-indebted, we will attempt to reach settlement with your creditors on reduced instalments, interest and capital. Should this fail, we will ask the court to make our proposal an Order of Court. Such Order will reduce instalments and extend the period of your credit agreements. As long as you honour your obligations under the debt review program, your creditors have no recourse against you or your assets. Once your debt has been paid in full, we will issue you with a clearance certificate confirming that your debt review program has been completed.
