This article outlines the Latest Debt Review Process Rules for Registered Debt Counsellors based on the latest task team agreements. These updated rules aim to improve efficiency, reduce backlogs, and benefit all stakeholders (consumers, debt counselors, and credit providers) by promoting faster debt repayment and a return to normal payment schedules.

Rules for the Debt Counsellor

• The Debt Counsellor is required to issue Form 17.1 within 5 business days after accepting the application for debt review from a consumer.
• The DC should conduct an assessment in accordance with the Affordability Assessment Guidelines to determine if the consumer is over-indebted and to determine the amount available to repay debt.
• If no COB is received within 5 business days, the DC may accept the information provided by the consumer as being correct to determine if the consumer is overindebted, in terms of Regulation 24(4).
• If a COB is received within 5 business days, the DC should use the information provided in the COB to determine if the consumer is over-indebted.
• If the consumer is found by the DC not to be over-indebted or not to be legally eligible to be under debt review, the DC should reject the application and send a Form 17.2 to the Credit Providers and Credit Bureaus after receiving confirmation from the NCR DHS updates team.
• If the consumer is found by the DC to be over-indebted and legally eligible to be under debt review, the DC should, within 10 business days of receiving the COB from all credit providers, notify both the Credit Provider/s and the Credit Bureaus of that fact per Form 17.2 and provide the Credit Provider/s with a debt rearrangement proposal that includes:

a) A summary of the affordability assessment conducted containing the before and after counseling situation with regard to monthly financial obligations and affordability of the consumer in standardized format; and

b) A debt re-arrangement proposal in accordance with the minimum requirements of the Debt Restructuring Guidelines and consisting of a standardized summary of the proposal (for all credit agreements).

• The debt re-arrangement proposal should include confirmation of the following:

a) The income and expenditure of the consumer as established by the Affordability
Assessment Guidelines.
b) Confirmation if an asset/liability restructuring is possible to improve the
indebtedness situation;
c) The amount available on a monthly basis for debt review repayments;
d) The identity of the appointed PDA through which payments will be received;
e) The commencement date of the proposed payments to the PDA which should not
commence later than 60 business days from date of application for debt review;
f) Copies of all debit order and stop payment cancellation instructions given by the
consumer.
g) An initial repayment plan for immediate implementation on the PDA’s system.

• The DC should follow up on all unpaid advices received from the PDA and, where required, take steps to maintain the continuous payment as proposed in the debt re-arrangement proposal submitted to the Credit Providers.

• The DC should, as part of the Affordability Assessment, verify that premiums in respect of credit-linked insurance that formed part of monthly repayment obligations under the credit agreement are maintained and included in the PDA’s payment plan.
• The premiums for such insurance as well as other insurance policies forming part of the consumer’s contractual obligations under the credit agreements such as asset insurance (homes and vehicles) as well as life and household content policies should be dealt with as essential expenses in the consumer’s budget.
• On receipt of all the Credit Provider responses within the prescribed 10 business day period, the DC should:

a) Record acceptance and non acceptance of proposals.
b) Generate a final repayment plan as follows:

I. Credit Providers who have consented to the repayment plan to benefit from
the effects of cascading as well as annual payment escalations agreed with
the consumer.
II. Credit Providers who have not consented to the repayment plan will receive
the amount allocated to them in the repayment plan as well as annual
payment escalations agreed with the consumer, subject to the other
requirements of the NCA.

c) A summary repayment plan to including the effects of (b) to be submitted to Credit
Providers as an indication of expected repayments. This will include the effect
of cascading and annual increases agreed by the consumer and would
simultaneously be submitted to the PDA to replace the interim payment plan with
the final payment plan to be implemented under the consent agreement.

d) A proposed payment plan to be submitted to Magistrate Court to include the
following:

I. Indication of accepted proposals with a request of confirmation through a
consent order.
II. Indication of non-accepted proposals.
III. Repayment plan for non consenting Credit Providers based on the amount
allocated to the non consenting Credit Provider and any other NCA
requirement.
IV. Repayment plan based on repayments excluding the effect of cascading and
escalation.
V. A clause to indicate that released affordability will be applied to Credit
Agreements where Credit Providers have accepted the proposals with
voluntary rate and term concessions.
VI. A clause to indicate that annual increase in repayments agreed by the
consumer will be applied to all Credit Agreements.
VII. A clause to indicate that all relevant provisions of the NCA including s 103(5)
are to be applied in determining the settlement date and total repayable
amount due by the consumer of each credit agreement.

e) Should the Court approved repayment plan differ from the previously loaded PDA
plan (with reference to non consenting Credit providers) the Debt Counsellor
should load a post Court repayment plan on the PDA.

• Upon receipt of the Credit Providers replies to the debt re-arrangement proposal, the DC should:

a) Set the matter down in a Magistrate Court and obtain a court date before the
expiry of the statutory 60 business days after the date on which the consumer
applied for the debt review.

b) Notify the respective credit providers of the outcome of the debt re-arrangement
proposal and the court date within 10 business days of having obtained it.

• If consent has been obtained from all of the Credit Providers involved, the DC should apply for a Consent Order.
• If consent has not been obtained, the DC should set the matter down as an opposed matter and the unconditional consents of those Credit Providers, if any, who have accepted the debt re-arrangement proposal should be included in the proposal to the Magistrate.
• The DC should notify all the Credit Providers involved of the Court date within 10 business days of it having been allocated.
• The DC should limit the number of matters contested through the Courts by:

a) Adhering to the task team assessment and debt re-arrangement guidelines in
order to procure consent wherever possible; and
b) Complying with the Magistrates Court rules and procedures in bring matters to
Court.

Suggested conduct of debt counselors

We suggest that Debt Counsellors who do not already do so should conduct themselves in the following fashion and that these provisions be incorporated into a debt counselor code of conduct

1. Debt Counsellors should not encourage debt stressed consumers to enter the debt review process with promises of payment holidays or other similar inducements.
2. Debt Counsellors should provide potentially debt stressed consumers with an information brochure that spells out the eligibility requirements, benefits and consequences of debt counseling and other alternatives available to them before taking them on as clients.
3. Debt Counsellors should not take on as clients, persons who have no money available for repayment or no reasonable prospect of finding money to commence the repayment of debt.
4. Debt Counsellors should take care in assuring that the full and correct particulars of consumers are obtained and relayed to credit providers.
5. Debt Counsellors should ensure that they perform all the steps required of them (including the requirements under the enhanced debt review process rules) within the legislated or agreed time frames and that they procure debit order mandates for payments to be collected by PDA’s wherever possible.
6. Debt Counsellors should ensure that they continue to assist the consumer under debt review to ensure finalization in Court and to ensure that monthly payments are met as per the Court Order. Debt Counsellors should ensure that the correct Credit Provider account details into which payments must be made are ascertained and provided to the PDAs.

In conclusion, these updated Debt Review Process Rules for Debt Counsellors, based on the latest task team agreements, represent a significant step towards a more efficient and effective debt review process. By adhering to these guidelines, Debt Counsellors can ensure faster processing times, reduce backlogs, and ultimately benefit all stakeholders involved. These improvements will lead to quicker debt repayment for consumers, a return to normal payment schedules, and a more streamlined system for credit providers. Furthermore, the suggested conduct for Debt Counsellors emphasizes ethical practices and consumer education, fostering trust and transparency in the debt review process. Consistent application of these rules and ethical guidelines will contribute to a healthier credit environment for both consumers and credit providers.