Understanding Debt Counselling in South Africa – Learner Guide

Description

Learner Guide

This product only includes the Learner Guides for the full course : Understanding Debt Counselling in South Africa.  It is not a full course and no certificate is offered for the purchase of the Learner Guides on their own.

Purpose

This short course aims to equip individuals in South Africa with a foundational understanding of the Debt Counselling process, also known as Debt Review. It addresses the critical need for clear, accessible information for those struggling with debt, outlining how this legal mechanism provides a structured path towards financial recovery.

Rationale

Navigating debt can be overwhelming. This focused, two-module outline distils essential information about the Debt Counselling in the South Africa process, offering a clear roadmap. Understanding the legal framework, eligibility, process steps, and realistic outcomes of Debt Review is vital for individuals seeking to manage overwhelming debt effectively and work towards sustainable financial recovery.

Module 1: Understanding Debt Counselling & Eligibility

This module introduces the concept of Debt Counselling and helps learners to determine whether they qualify for the process in South Africa. It also outlines the legal foundation and key participants involved.

Introduction to Debt Counselling in South Africa

This section defines Debt Counselling (also known as Debt Review) as a legal process under the National Credit Act (NCA). It explains the primary purpose: assisting over-indebted consumers find a path to financial recovery by managing their debt.

Are You Over-Indebted? Eligibility Criteria

Learners will explore the definition of “over-indebtedness” as per the NCA. This topic details the specific signs that indicate eligibility for Debt Counselling and clarifies situations where the process is generally not suitable.

The Legal Framework and Key Players

This section outlines the legal environment governing Debt Review in South Africa, focusing on the National Credit Act and the role of the National Credit Regulator (NCR). It introduces the key entities involved: the Debt Counsellor, credit providers, Payment Distribution Agencies (PDAs), and the courts.

Starting the Debt Review Process: Initial Steps

This topic covers the initial phase of applying for Debt Counselling. It describes the first steps, including consulting an NCR-registered Debt Counsellor, providing necessary financial information, the assessment process, and the formal notification (Form 16 and Form 17.1) that initiates the Debt Review process.

Module 2: The Debt Review Process, Outcomes, and Practicalities

Module 2 delves into the core steps of the Debt Counselling process, discusses its outcomes, and provides practical advice for a successful journey towards financial recovery.

The Core Process: Negotiation and Court Application

This section details the central activities undertaken by the Debt Counsellor after the initial notification. It explains the process of gathering outstanding balances, drafting a restructured payment plan, negotiating with credit providers, and the potential requirement for a court application if agreements cannot be reached.

Managing Payments and Achieving Clearance

Learners will understand how restructured payments are managed through a Payment Distribution Agency (PDA). This topic covers making single monthly payments, how these are distributed, the repayment period, and the crucial final step of receiving the Form 19 Clearance Certificate that signifies the successful completion of the Debt Review process for listed debts. Secured debt handling is also briefly discussed.

Benefits and Drawbacks of Debt Counselling

This section provides a balanced view by exploring the significant advantages of Debt Counselling, such as legal protection and asset preservation. Consequently, it also covers the potential disadvantages and limitations, including impact on credit record, inability to access new credit, and potentially longer repayment periods that are inherent in the Debt Review process.

Debunking Common Myths and Choosing Your Debt Counsellor

Several common misunderstandings about Debt Counselling in South Africa are addressed in this topic, clarifying what the process does and does not entail (e.g., debt write-off, asset loss). Furthermore, practical considerations and tips for selecting a reputable, NCR-registered Debt Counsellor are provided.

Tips for Success and Your Path to Financial Recovery

The final topic offers actionable advice for individuals undergoing Debt Review. It emphasises the importance of discipline, adhering to the new budget, communicating with the Debt Counsellor, and avoiding new debt to ensure the successful completion of the process and achieving lasting financial recovery.

Prerequisites

Learners should possess basic literacy skills and the ability to comprehend fundamental financial concepts. No prior knowledge of Debt Counselling, Debt Review, or the National Credit Act in South Africa is required to undertake this course.