Debt Counselling which is also referred to as debt review, it is a debt relief measure provided for in the NCA, to assist over-indebted consumers struggling to pay their debts on a monthly basis.
To determine the level of over-indebtedness and how consumers can be assisted, an assessment of the consumers' financial position is conducted by comparing the income of the consumer against the basic expenses and debt obligations of the consumer.
If the consumer is found to be over-indebted, negotiations with credit providers for reduced payments and the restructuring the debts will commence.
Lastly, the restructuring of debts must be confirmed by the Magistrate Court or the National Consumer Tribunal(NCT) through a court order or consent order.
Debt counselling is conducted by a Debt Counsellor (DC) registered with the NCR. Upon registration, the DC is provided with a registration certificate which he/she should display at his/her place of practice. This certificate can be requested for inspection by the consumer if not displayed at the place of practice.
The DC has an obligation to explain the debt counselling process and consequences of being under debt counselling to the consumer before the consumers can sign the application for debt counselling. All applicable fees must be disclosed to the consumer in writing.