Understanding Debt Counselling Application Process

When a consumer applies for debt counselling

When a consumer applies for debt counselling the Debt Counsellor will ask them to fill in a form with information relating to their situation. The first part of the form will be about where you live, what your ID number is, who your next of kin is and whether you are married or not.

The next part will be about your income. Who do you work for, how much do you earn and what other sources of income you have each month. The income of your whole family or household should be set out clearly. If you earn commission or are a self employed individual then you can put down an average earning. All you do is take the last few months income and divide by the number of months you have the figures for ( to get an average income figure).

Next will be the section about your monthly household expenses. This will be the normal day to day running costs. These are not your debts but rather what it costs you to live each month. Included in this would be accommodation but not a bond repayment ( as that is a debt). It would cover things like your telephone bill, your electricity bill and you monthly shopping costs. You should also add in things that you maybe only pay once a year such as school fees or your car or TV licence. Simply take the yearly cost and divide it by 12 ( months) so that you have the figure you should be saving toward that cost each month ( even though you don’t normally do things that way). Don’t forget about things like vehicle maintenance (services) and new tyres. Smaller things should be added as well like: snacks at work each day, cooldrinks or haircuts.

Next is the part that has been on your mind, the debts section. Here you should put down every single debt. Don’t leave any debt out no matter how small or old. You can even include debt that you owe to family and friends since this will help the Debt Counsellor understand your situation entirely. It is very helpful if you have statements or accounts for these debts since these will have helpful details like account numbers and interest rates.

The final part of the form will be terms and conditions which state that you are being honest and accurate ( as accurate as you can be at the time) etc. This section will probably also tell you a bit about the costs of debt review if your application is accepted and you qualify (and if you decide to go ahead with the process). Some Debt Counsellors will also include a limited power of attorney document in which you give them permission to contact your creditors for information about your accounts.

It is however important to know that a form 16 document is not a contract in terms of the Consumer Protection Act. Most Debt Counsellors do not actually have such a contract which states what services they will and won’t render you. Feel free to ask for one, maybe the Debt Counsellor you are dealing with will have one (but probably not).

The Form 16 that you fill in will eventually be added to court documents that are shown to a Magistrate (so that they can see what your situation was when you applied for help).

Ready to take control of your finances? Contact us today to start your journey towards financial freedom with Zero Debt. Our professional debt counselors are here to guide you through the debt review process step-by-step. Fill out our contact form or call us at 087 701 9665 to schedule your free, no-obligation consultation. Let’s work together to relieve your financial stress and secure your future.