The Debt Counselling Process Explained
Entering debt counselling might feel overwhelming, but the process is straightforward. Here's exactly what happens:
Step 1: Free Consultation
You meet with a registered debt counsellor who:
- Assesses your financial situation
- Reviews all your debts and income
- Determines if you qualify for debt review
- Explains your options honestly
Step 2: Application & Documentation
If you decide to proceed, you'll provide:
- ID document
- Proof of income (3 months payslips)
- Bank statements (3 months)
- List of all creditors and amounts owed
Step 3: Creditors Are Notified
Within 5 days, all your creditors receive notification that you're under debt review. From this moment, they cannot take legal action against you.
Step 4: Debt Restructuring Proposal
Your debt counsellor:
- Calculates what you can realistically afford
- Negotiates reduced interest rates with creditors
- Creates a repayment plan that fits your budget
Step 5: Court Order
The restructured repayment plan is made a court order, giving it legal standing. This protects both you and your creditors.
Step 6: Monthly Payments Begin
You make one monthly payment to a Payment Distribution Agency (PDA), which distributes funds to all your creditors. No more juggling multiple payments.
Step 7: Clearance Certificate
Once all debts are paid, you receive a clearance certificate. Your name is removed from the debt review flag, and you're officially debt-free.
How Long Does Debt Review Take?
Typically 3-5 years, depending on:
- Total amount of debt
- Your monthly payment capacity
- Interest rate reductions achieved
What Does It Cost?
Debt counselling fees are regulated by the NCR and included in your monthly payment—there are no surprise costs.
Questions about the process? Contact Charlé for a free, no-obligation consultation. As a boutique practice, I personally guide each client through every step.