In fact, no credit provider can be forced to form part of the debt review process. One credit provider cannot for example receive 70% of the original instalment and others only 15%.Ī common misconception among consumers is that all credit providers are obliged to accept the debt counsellor’s proposal- they are not. The debt counsellor may during this process also propose reduced interest rates on certain agreements, however, it is important that certain credit providers cannot benefit to the detriment of others. This document sets out the amounts that each credit provider shall receive monthly during the debt review, as noted proportionate to what is available to distribute. The debt counsellor now prepares a proposal of repayments to be sent to credit providers. It also serves to protect the consumer from continuing with obtaining credit which he or she cannot afford to repay. This flag serves to safeguard the rights of credit providers in preventing additional credit from being obtained by the consumer.
#Debt quencher review update
The credit bureaus update their records to reflect that the consumer is under debt review.
Once the consumer has been found over-indebted and the forms 17.2 sent to credit providers, the debt counsellor is obliged to inform the credit bureau of such successful application. This notice informs all affected credit providers that the consumer’s debt review application has been accepted and that the consumer is now under debt review. This notice is sent to all credit providers advising them that the consumer has applied for debt review and requesting that certificates of balance be provided to the debt counsellor in order to facilitate the process. Each credit provider is paid pro-rata the amount of debt held.
#Debt quencher review full
If there is an amount available that is roughly 50% of the full instalments, this means that each credit provider will receive monthly payments of that percentage. The remaining amount is what is available for distribution. This is done by subtracting the reworked regular expenses from the consumer’s income. The debt counsellor then determines what amount is available monthly to the credit providers in repayment of the consumer’s debts. Once this exercise has been done, the debt counsellor assists the consumer in reworking his or her budget to the extent that excess and unnecessary items are removed. The debt counsellor does an exercise of simple mathematics to ascertain whether the consumer’s expenses exceed his or her income. Credit agreement repayment amounts and details.Regular monthly expenses (budget) such as food and fuel.The consumer providers the following financial information for the debt counsellor to determine whether he or she is over-indebted: This form contains the personal details of the consumer and the consumer’s financial circumstances. Once a consumer approaches a debt counsellor for advice or with the intention of entering into the debt review process, a form 16 must be completed by the consumer with the debt counsellor’s guidance. Not only can they not apply for any form of credit but is sometimes prevents them from being offered employment opportunities. Naturally, the flag is a major hurdle to those who are burdened with it. This flag, in layman’s terms is the inscription on the Credit Bureau indicating that a person has applied for debt review and that creditors should not grant any credit to such consumer. In our day-to-day operations, we assist many consumers in removing the dreaded debt review flag on the Credit Bureaus. This article is aimed at shedding light on the debt review process and what precisely it entails from a consumer perspective.
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