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National Credit Act, 2005 (Act No. 34 of 2005)


National Credit Regulations, 2006

Chapter 3 : Consumer Credit Policy

Part D : Over-indebtedness, reckless lending and debt counselling

24. Application for debt review


(1) A consumer who wishes to apply to a debt counsellor to be declared over-indebted must:
(a) Submit to the debt counsellor a completed Form 16; or
(b) Provide the debt counsellor with the following information:
(i) personal details, including:
(aa) name, initials and surname;
(bb) identity number, if the consumer does not have an identity number, the passport number and date of birth;
(cc) postal and physical address;
(dd) contact details.
(ii) all income, inclusive of employment income and other sources of income (specify).
(iii) monthly expenses, inclusive of, but not limited to:
(aa) taxes;
(bb) unemployment insurance fund;
(cc) pension;
(dd) medical aid;
(ee) insurance;
(ff) court orders;
(gg) other (specify
(iv) List of all debts, disclosing monthly commitment, total balance outstanding, original amount and amount in arrears (if applicable) inclusive of, but not limited to:
(aa) home loans;
(bb) furniture retail;
(cc) clothing retail;
(dd) personal loans;
(ee) credit card;
(ff) overdraft;
(gg) educational loans;
(hh) business loans;
(ii) car finances and leases;
(jj) sureties signed;
(kk) other (specify).
(v) Living expenses, inclusive of, but not limited to:
(aa) groceries;
(bb) utility and continuous service;
(cc) school fees;
(dd) transport costs;
(ee) other (specify).
(vi) A declaration and undertaking to commit to the debt restructuring.
(vii) A consent that a credit bureau check may be done.
(viii) Confirmation that the information is true and correct.
(c) Submit to the debt counsellor the documents specified in Form 16.
(d) Pay the debt counsellor’s fee, if any, provided that such fee may not exceed the maximum fee prescribed in Schedule 2.


(2) Within five business days after receiving an application for debt review in terms of section 86(1) of the Act, a debt counsellor must deliver a completed Form 17.1 to all credit providers that are listed in the application and every registered credit bureau.


(3) The debt counsellor must verify the information provided in terms of subsection (1) above by requesting documentary proof from the consumer, contacting the relevant credit provider or employer or any other method of verification.


(4) In the event that a credit provider fails to provide a debt counsellor with corrected information within five business days of such verification being requested, the debt counsellor may accept the information provided by the consumer as being correct.


(5) A notice contemplated in sub-regulation (2) must be sent by fax, registered mail or e-mail provided that the debt counsellor keeps a record of the date, time and manner of delivery of the notice.


(6) Within 30 business days after receiving an application in terms of section 86(1) of the Act, a debt counsellor must make a determination in terms of section 86(6).


(7) When assessing the consumer’s application in terms of section 86(6)(a) of the Act, the debt counsellor must refer to section 79 and further consider the following:
(a) A consumer is over-indebted if his/her total monthly debt payments exceed the balance derived by deducting his/her minimum living expenses from his/her net income;
(b) Net income is calculated by deducting from the gross income, statutory deductions and other deductions that are made as a condition of employment;
(c) Minimum living expenses are based upon a budget provided by the consumer, adjusted by the debt counsellor with reference to guidelines issued by the National Credit Regulator.


(8) In making a determination that a particular debt is reckless, as per section 86(6)(b) of the Act, a debt counsellor must refer to section 80 of the Act and further consider the following;
(a) the level of indebtedness of the consumer after that particular agreement was entered into; and
(b) whether, when that particular credit agreement was entered into, the total debt obligations including the new agreement exceeded the net income reduced by minimum living expenses;
(c) the consumers’ bank statement, salary or wage advice and records obtained from a credit bureau;
(d) any guidelines published by the National Credit Regulator proposing evaluative mechanisms, models and procedures in terms of section 82 of the Act;


(9) Any arrangement made by the debt counsellor with credit providers must be reduced to writing and signed by all credit providers mentioned, the debt counsellor and the consumer.


(10) After completion of the assessment, the debt counsellor must submit form 17.2 to all the affected credit providers and all registered credit bureaux within 5 business days;


(11) When making a determination in terms of sections 79(3)(b)(ii) and 80(3)(b)(ii), the value of a credit guarantee is 0.