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
This consultation is free and confidential.
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
Your debt counsellor handles the paperwork and formally applies to the NCR.
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.
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Questions about the process? Contact Charlé for a free, no-obligation consultation. As a boutique practice, I personally guide each client through every step.