Before a repayment proposal can be completed, an Affordability

Before a repayment proposal can be completed, an Affordability Assessment should be conducted by the Debt Counsellor. In this process it is recommended that Debt Counsellors consider the guidelines in this document. When this process is followed the following can be achieved:

a) Make sure a realistic and sustainable budget for the consumer and his or her family. This is only possible if all the financial needs of the consumer have been catered for in his budget. It is also important to take into account that this budget has to be implemented by the consumer for the duration of the debt review.

b) An amount is determined for repayment of the debt. In cases where the consumer applies for Debt Counselling and where the consumer has no income or no income is available for debt repayments or there is no prospect of finding income within a 3 month period to commence repayment of debt, formal Debt Counselling should not be considered as a viable option for the consumer and it is recommended that the Debt Counsellor refuse to accept the application for Debt Counselling. Debt Counsellors are reminded that they have a statutory obligation in terms of the NCA to conduct a detailed financial assessment of the consumer’s income and expenditure and are experts in this field. The outcome of the financial assessment is also included in the submission to the Court and if required Debt Counsellors can be requested to substantiate this in Court. With this in mind the following affordability assessment guideline has been drawn up and accepted by all Debt Counsellor Associations. The Affordability Assessment Process Steps are highlighted in Annexure B1. 2. Initial Considerations