Signed contract with your debt counsellor?

When beginning the debt review process many consumers will be asked to fill in a standard form called a Form 16. This form helps set out the consumers income vs expenses as well as debt obligations to the best of their knowledge at the time.

Often times consumers and Debt Counsellors mistake this form for a contract between the two parties since most Debt Counsellors have included sections to this form which set out the costs and possibly a limited power of attorney.

A Form 16 is not a service level contract however.

Under the Consumer Protection Act a contract to provide a service should set out clearly the services that will (and will not be offered)

If you are a Debt Counsellor you should prepare such a document for each consumer and have them go through each section and clearly indicate that they understand. Keep the Jargon to an absolute minimum and clearly state what services you will offer. Make clear to the consumer that their debt remains their debt and the obligation to pay their debt and normal monthly running costs lies firmly with them.

Also state that Debt Counsellors do not have authority to restructure debt – only courts do.

clearly worded contract can help avoid any confusion on the part of a consumer.

Take the first step towards financial clarity and peace of mind with Zero Debt. Whether you’re just starting the debt review process or need guidance on your existing debt obligations, our certified Debt Counsellors are here to help. Call us directly at 087 702 1738 or visit our contact page to connect with our supportive team. If you’re pressed for time, simply request a Free Call Back, and one of our experienced counsellors will reach out to you. At Zero Debt, we provide clear, straightforward advice to ensure you fully understand your debt obligations and the services we offer. Contact us today and start your journey to financial freedom.

FAQs and Answers

1. Is Form 16 a legal contract with my debt counsellor?
No, Form 16 is not a service level contract. It collects income, expenses, and debt details but is not a binding agreement.

2. Why do I need a separate contract with my debt counsellor?
A clear contract outlines what services will and will not be provided, helping avoid misunderstandings and protecting both parties.

3. What should a debt counselling contract include?
It should detail the services offered, any exclusions, payment responsibilities, and clarify that only courts can restructure debt.

4. Can a debt counsellor restructure my debt?
No, debt counsellors cannot legally restructure debt. Only a court can grant a debt restructuring order under the National Credit Act.

5. Who remains responsible for my debts during debt review?
You remain responsible for paying your debts and living costs. A contract should make this clear to prevent confusion.

6. Why is simple language important in a debt counselling contract?
Using clear wording ensures you fully understand your obligations and the scope of services, reducing the chance of disputes.

7. Should I sign a contract before starting debt review?
Yes, it’s good practice to review and sign a contract outlining the terms, so you know exactly what to expect from the service.

8. How can Zero Debt help with debt counselling clarity?
Zero Debt’s certified counsellors offer clear advice and straightforward contracts so you understand every step of your debt journey.