Withdrawal from Debt Review after sub - Debt...
Transcript of Withdrawal from Debt Review after sub - Debt...
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CIF - Sub Committee recommendation to CIF
Withdrawal from Debt Review
Terminology
It is important to clarify the terminology used in this document:
Termination by Debt Counsellor: This means terminating the Debt Review which includes removing
the Debt Review status of the Consumer from all Credit Bureaus.
Withdrawal by Debt Counsellor: Means ending the provision of Debt Review Services to a Consumer
which does not include removing of the Debt Review Status from all Credit Bureaus.
Termination by the Consumer: This means terminating the Debt Review which includes removing of
the Debt Review status of the Consumer from all Credit Bureaus.
Withdrawal by the Consumer: Means ending the Debt Review Service provided by a Debt
Counsellor to that Consumer which does not include removing of the Debt Review Status from all
Credit Bureaus.
Transfer: Means the Transfer of a Consumer currently under Debt Review from a Registered Debt
Counsellor to another Registered Debt Counsellor.
1. Introduction
The National Credit Act (“NCA”) provides guidance on the statutory powers of a Debt Counsellor
regarding the “terminating” of a Debt Review matter once the Consumer has applied for Debt
Review in terms of Section 86(1). This matter was considered in the Rougier vs Nedbank Limited
Judgment. This matter will be discussed in more detail below.
The abovementioned Judgement did not deal with the issue of whether a Consumer may
“terminate” from Debt Review once they have applied in terms of Section 86(1). The NCA, in Section
86(10), makes provision for a Credit Provider to “terminate” a credit agreement from Debt Review
but the NCA does not make any provision for a Consumer to “terminate” a Debt Review once they
have applied for Debt Review in terms of Section 86(1).
1.1. Termination by the Debt Counsellor
In the Rougier vs Nedbank Limited Judgement the Court has considered the NCA in respect
of its interpretation of inter alia Section 86 of the NCA. It was held that once a Consumer
has made an application for Debt Review to a Debt Counsellor in terms of Section 86(1), the
Debt Counsellor may do only three things, namely:
a. Reject the application (if the Debt Counsellor concludes that the Consumer is not
over indebted); or
b. Recommend to the Consumer and the Credit Provider that they should voluntarily
agree on a debt rearrangement plan (if the Debt Counsellor concludes that although
the Consumer is not over indebted, but is nevertheless experiencing, or likely
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to experience, difficulty in satisfying all the Consumer’s obligations under credit
agreements in a timely manner); or
c. If the Consumer is over-indebted the Debt Counsellor may issue a proposal to the
Magistrates Court recommending that the Court make either or both of the
following orders:
i. One or more of the Consumer's credit agreements be declared reckless; and
ii. That one or more of the Consumer's obligations be rearranged (as per Section
86(7)(c)(ii)).
In this regard, it is clear that there is no provision in the NCA for a Debt Counsellor to
terminate a Debt Review once the Consumer has made an application in terms of Section
86(1) and the Debt Counsellor is limited to one of the three "options" as set out above.
In terms of this Judgement any act by the Debt Counsellor to terminate a Debt Review would
be ultra vires the powers of the Debt Counsellor. In this regard, a Debt Counsellor is a
legislatively created “entity” and only has the powers and authority provided to it by the
NCA.
The Court also held that in terms of Section 88(3) as read with Section 86, a Credit Provider
would be barred from instituting action against a debtor until one of the following has
occurred:
a. Where the Debt Counsellor rejects an application and the Consumer does not
thereafter apply to the Magistrates Court for an order in terms of section 86(7)(c) of
the NCA within the required time frame; or
b. Where a Credit Provider terminates the Debt Review process on notice if more than
60 days has elapsed after the Consumer applied for Debt Review1; or
c. If the Court determined that the Consumer is not over indebted or rejects the Debt
Counsellor’s proposal or the Consumer's application; or
d. If a Court has made an Order rearranging the Consumer's obligations or where the
Consumer and Credit Provider voluntarily enter into an rearrangement plan and all
of the Consumer's obligations under the credit agreements are fulfilled (unless the
Consumer fulfils the obligations by way of a consolidation agreement); or
e. If the Consumer defaults on any obligations in terms of a rearrangement plan agreed
to between it and the Credit Provider or as ordered by a Court/Tribunal.
1 If the National Credit Amendment is adopted Credit providers will be unable to terminate such review if such
review is filed in Court as contemplated in terms of section 87.
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2. Current Market Practices
There are currently a number of market practices where a “termination” process is taking place
and these practices may not be in line with the requirements of the NCA. In many cases these
“termination” practices are unlawful.
a. Consumer’s termination before Court Order is in place: Debt Counsellors confirmed that
20% of Consumers who apply for Debt Review in terms of Section 86(1) each month have no
intention to remain under Debt Review and they terminate the Debt Review after the expiry
of 60 business days. On receipt of the notice received from the Consumer the Debt
Counsellor then terminates the Debt Review. The Consumer then applies for Debt Review
with the next Debt Counsellor. During this process the Consumer pays nobody. This action is
unlawful for two reasons. The Debt Counsellor has no statutory power to terminate the Debt
Review and the Consumer help themselves to repeated payment holidays.
b. Consumers request for transfers: In some cases Consumers are not satisfied with a
particular Debt Counsellor and request a transfer to a new Debt Counsellor.
c. Consumer termination after Court Order is in place:
� In some cases the Consumer selects to stop making any payments as agreed in the Debt
Review Court Order and also instruct the Debt Counsellor to terminate the Debt Review.
� In other cases a Consumer selects to end the services of the Debt Counsellor but
continues to pay Credit Providers (and not the Debt Counsellor) as per the Court Order.
Where this is the case the Consumer instructs the Debt Counsellor to terminate the Debt
Review. Where the Debt Counsellor accedes to this termination instruction, it removes
the Debt Review status of the consumer from all the Credit Bureaus and this then allows
the consumer to apply for more credit while he/she continues to pay the reduced Debt
Review payments to all its existing creditors in terms of the Debt Review Order. This
termination is ultra vires because The Debt Counsellor has no statutory power to
terminate the Debt Review.
� In some cases Consumers request a transfer to another Debt Counsellor after the Court
Order has been obtained.
d. Termination by Debt Counsellor:
� When a Consumer, who has applied for Debt Review in terms of Section 86(1), fails to
co-operate as required in Section 86(5) of the NCA (which includes failure to pay for
services rendered) the Debt Counsellor would end the service provided to the Consumer
in terminating the Debt Review. This action by the Debt Counsellor is ultra vires because
the Debt Counsellor has no statutory power to terminate the Debt Review.
e. Credit Provider action:
� Credit Providers contact the Consumer who has applied for Debt Review in terms of
Section 86(1) with a promise of new debt on condition that the Consumer terminate the
Debt Review. These Consumers then request the Debt Counsellor to terminate the Debt
Review. This termination is ultra vires because the Debt Counsellor has no statutory
power to terminate the Debt Review.
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� In other cases Credit Providers would threaten a Consumer with legal action unless the
Consumer terminates the Debt Review. These Consumers then request the Debt
Counsellor to terminate the Debt Review to prevent legal action or termination by the
Credit Provider. This termination is ultra vires because The Debt Counsellor has no
statutory power to terminate the Debt Review.
� Some Credit Providers would, especially on Home Loans, would agree on a voluntary
repayment arrangement on condition that the Home Loan is excluded from Debt
Review. In these cases Consumer would request the Debt Counsellor to either exclude
the Home Loan from Debt review or to terminate the Debt Review. This termination is
ultra vires because the Debt Counsellor has no statutory power to terminate the Debt
Review. The NCA also does not make provision for the exclusion of any Credit
Agreement from Debt Review the Debt Counsellor or Credit Provider has no statutory
power to exclude any Credit Agreement from Debt review unless a valid Section 129
notice has been issued by the Credit provider and the debt is then excluded in terms of
this Section 129 notice or a valid Section 86(10) termination has been issued by the
Credit Provider.
In terms of a previous voluntary Industry agreement, Debt Counsellors were allowed to
terminate a Debt Review but it is clear that the abuse of this opened Debt Counsellors to undue
risks. For example where a Debt Counsellor terminates a Debt Review this enables the Consumer
to take payment holidays and “sanction” the approval of new debt due to the fact that the Debt
Review was incorrectly terminated.
3. Previous Industry agreement on withdrawals and transfers
Industry participants have agreed on an informal practical transfer and withdrawal process for:
• Consumer withdrawal Pre- Court Order.
• Consumer withdrawal Post- Court Order.
• Withdrawal by the Debt Counsellor pre- Court Order
• Withdrawal by the Debt Counsellor post- Court Order
• Process for transfer pre- Court Order.
• Process for transfer post- Court Order.
A form 17.4 and form 17.7 was agreed and the voluntary process was implemented.
This voluntary industry agreement should be cancelled and replaced by this document.
4. Industry agreement on Termination, Withdrawal and Transfers
Termination by Debt Counsellor: Once a Consumer’s Debt Review application has been
accepted in terms of Section 86(1) the Debt Counsellor has no statutory power to terminate the
Debt Review.
Termination by Consumer: Once a Consumer’s Debt Review application has been accepted in
terms of Section 86(1) the Consumer cannot terminate the Debt Review.
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Withdrawal by Debt Counsellor: Once a Consumer’s Debt Review application has been accepted
in terms of Section 86(1) the Debt Counsellor may end his or her service to the Consumer if the
Consumer fails to co-operate despite a reasonable request by the Debt Counsellor to co-operate.
In cases where the Debt Counsellor ends his or her service, the Consumer remains under Debt
Review without a Debt Counsellor. In such instances, the withdrawing Debt Counsellor cannot
remove the Consumer’s Debt Review status from the Credit Bureaus. It is in the interest of
Consumers to find another registered Debt Counsellor and to request a transfer.
Withdrawal by the Consumer: Once a Consumer’s Debt Review application has been accepted
in terms of Section 86(1), a Consumer may decide to end the service of the Debt Counsellor. In
cases where the Consumer ends the service of the Debt Counsellor, the Consumer remains
under Debt Review without a Debt Counsellor. It is in the interest of Consumers to find another
registered Debt Counsellor and to request a transfer.
Transfer of Debt Review: In cases where the Consumer has ended the service of the Debt
Counsellor or the Debt Counsellor closed his/her practice or where a Debt Counsellor has made
arrangement for the transfer of all Consumers in his/her practice or where the NCR sees fit to
transfer a Consumer to another Registered Debt Counsellor, the request for transfer should be
allowed and facilitated by all parties involved.
Clearance Certificate: A Debt Counsellor may issue a Clearance Certificate, in terms of Section
71 of the NCA once all the debt has been repaid.2
Terminations by Credit Providers: A Credit Provider may terminate a Credit Agreement from the
Debt Review after the expiry of 60 business days.3
Consumer termination in terms of the NCA: Currently the NCA provides no guidance to allow a
Consumer to terminate their Debt Review. An amendment of the NCA will be required if a
Consumer should be allowed to terminate a Debt Review.
5. Industry Process Agreement on Termination and Withdrawal
5.1. Pre Court Order
In this scenario the Consumer’s Debt Review Application has been accepted by the Debt
Counsellor in terms of Section 86(6).
5.1.1. Withdrawal by the Consumer:
A Consumer may at any stage end the service of a Debt Counsellor.
2 If the National Credit Amendment is adopted a Debt Counsellor will be able to issue a Clearance Certificate if
the Consumer can demonstrate financial ability to satisfy every current obligation under every credit
agreement. 3 If the National Credit Amendment is adopted Credit providers will be unable to terminate such review if such
review is filed in court as contemplated in terms of section 87.
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If a Consumer wishes to end the service of the Debt Counsellor, written notice must be
given to the Debt Counsellor to end the service and the reasons why.
The Debt Counsellor must retain this written instruction from the Consumer and
inform the Consumer in writing of the following:
• Consequences of ending the Debt Counsellor Service.
• That the ending of the service of the Debt Counsellor does not mean that the
Debt Review has been terminated. The Debt Counsellor has no statutory
power to remove the consumer’s Debt Review status from the Credit Bureaus.
This means that the Consumer will remain under Debt Review despite the
ending of the Service.
• Credit Providers may take legal action on agreements that are in default.
• The Consumer is still liable for Debt Counselling and Legal Fees as per the
approved NCR guidelines.
• It is in the Consumer’s interest to arrange for a transfer to another Registered
Debt Counsellor with immediate effect.
• Where a Debt Counsellor has already lodged a Debt Review Application the
Debt Counsellor will be required to file a notice of withdrawal to all affected
parties. The Consumer is required to carry the cost of this withdrawal notice.
It is recommended that the NCR amend its Debt Help system to enable Debt
Counsellors to notify the NCR when a Consumer has ended the service of the Debt
Counsellor. This notification to the NCR should not result in the removal or termination
of the Debt Review status from Credit Bureaus. Until this enhancement is in place the
Debt Counsellor is not required to update NCR Debt Help.
5.1.2. Withdrawal by the Debt Counsellor:
Where a Consumer fails to co-operate with the Debt Review process as defined in
Section 86(5), the Debt Counsellor may withdraw his/her Debt Review services to that
particular Consumer.
A consumer acting in bad faith includes the following:
• Dishonesty.
• Lack of co-operation.
• Not responding or adhering to reasonable requests by the Debt Counsellor.
• Non-payment of the Debt Counselling and Legal Fees.
• Non-payment to Credit Providers in terms of proposed repayment plan.
• Any other behaviour amounting to abuse of the process.
The Debt Counsellor must inform the Consumer of the withdrawal of Service in writing
and this notice should include the following information:
• Reason for withdrawal of the Debt Review Service.
• Provide Consumer with option to initiate steps to avoid withdrawal of the Debt
Counsellor’s Service within 10 business days.
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• Inform the Consumer that Credit Providers may take legal action on any
agreements in default.
• Inform the Consumer that despite the ending of the Debt Review Service the
Debt Counsellor does not have the statutory power to terminate the Debt
Review. This means that the Consumer will remain under Debt Review and the
Debt Review status listing at Credit Bureaus will remain in place.
• The Consumer is still liable for Debt Counselling and Legal Fees as per the
approved NCR fee guidelines up to the date of that the Debt Counsellor
withdraws its service as per the approved NCR fee guidelines.
Should the Consumer fail to co-operate after the expiry of the notice period, the
Debt Counsellor should inform the Consumer, in writing, as follows:
• That the Debt Counsellor has ended his/her Debt Review service from the
effective date in the notice.
• Inform the Consumer of the amount of fees that is payable to the Debt
Counsellor in relation to Debt Counselling and Legal Fees as per the approved
NCR fee guidelines and that non-payment may result in the commencement of
legal action.
• Inform the Consumer that, despite the ending of the Debt Review Service, the
Debt Counsellor does not have the statutory power to terminate the Debt
Review. This means that the Consumer will remain under Debt Review and the
Debt Review status listing at Credit Bureaus will remain in place.
• Remind the Consumer that it is in his/ her interest to source a replacement
Registered Debt Counsellor with immediate effect and to request a transfer.
Where a Debt Counsellor has already lodged a Debt Review Application, the Debt
Counsellor will be required to file a notice of withdrawal to all affected parties. The
Consumer is required to carry the cost of this withdrawal notice. It is recommended
that the NCR amend the Debt Counselling Fee Guideline accordingly.
It is recommended that the NCR amend its Debt Help system to enable Debt
Counsellors to notify the NCR when a Debt Counsellor has ended the Debt Review
Service. This notification to the NCR should not result in the removal or termination of
the Debt Review status listing from Credit Bureaus. Until this enhancement is in place,
the Debt Counsellor is not required to update NCR Debt Help.
5.2. Post Court Order
In this scenario a Debt Review Court order has been obtained and the Consumer is required
to make payments as per the Court Order.
5.2.1. Withdrawal by the Consumer:
A Consumer may at any stage end the service of a Debt Counsellor subject to the
following:
a. Non-paying Consumer
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If a Consumer wishes to end the service of the Debt Counsellor, written notice must be
given to the Debt Counsellor to end the service and the reasons why.
The Debt Counsellor must retain this document and inform the Consumer, in writing,
as follows:
• That Credit Providers, as a result of the non-compliance to the repayment plan
approved in the Court Order, can commence with legal action.
• That despite the ending of the Debt Review Service, the Debt Counsellor does
not have the statutory power to terminate the Debt Review. This means that
the Consumer will remain under Debt Review and the Debt Review status
listing at Credit Bureaus will remain in place.
• Where a Debt Review order is in place and the Consumers ends the service of
the Debt Counsellor, it is advisable that the Debt Counsellor file a notice in the
Court file and to inform all parties.
• Remind the Consumer that it is in his/her best interest to source a
replacement Registered Debt Counsellor with immediate effect.
b. Paying Consumer
If a consumer wishes to end the service of the Debt Counsellor, written notice must be
given to the Debt Counsellor to end the service and the reasons why.
The Debt Counsellor must retain this document and inform the Consumer, in writing,
as follows:
• That Credit Providers, as a result of the Consumer’s non-compliance to the
repayment plan approved in the Court Order, can commence with legal action.
• That despite the ending of the Debt Review Service, the Debt Counsellor does
not have the statutory power to terminate the Debt Review. This means that
the Consumer will remain under Debt Review and the Debt Review status
listing at Credit Bureaus will remain in place.
• If the Consumer wants to cancel the Debt Review Court order they may apply
for the Debt Review Order to be rescinded in terms of Section 36 and rule 49
of the Magistrate Court Act. The Consumer is required to initiate and pay for
the rescission application. This option may be successful if the Consumer can
prove that they are no longer over-indebted.
• Remind the Consumer that it is in his/her best interest to source a
replacement Registered Debt Counsellor with immediate effect.
• Where a Debt Review order is in place and the Consumer ends the service of
the Debt Counsellor, it is advisable for the Debt Counsellor to file a notice in
the Court file and to inform all parties.
It is recommended that the NCR amend its Debt Help system to enable Debt
Counsellors to notify the NCR when a Debt Counsellor has ended the Debt Review
Service. This notification to the NCR should not result in the removal or termination of
the Debt Review status listing from Credit Bureaus. Until this enhancement is in place,
the Debt Counsellor is not required to update NCR Debt Help.
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6. How can a Consumer get out of Debt Review
Based on the provisions in the NCA, a Consumer‘s Debt Review will come to an end in the following
circumstances:
6.1. Repayment of all the Debt and issuing of a Clearance Certificate
A Consumer who has satisfied all obligations under every agreement that was part of the debt
re-arrangement order or agreement in accordance to that order or agreement may, in terms of
Section 71 of the NCA, apply for a Clearance Certificate from a Debt Counsellor.
6.2. Application to Court for rescindment of the Debt Review Order
A Consumer may apply to a Court to rescind the Debt Review Order and request the Court to
declare the Consumer not over-indebted.
6.3. When the Consumer can resume normal contractual payments
If the National Credit Amendment Bill is approved by Parliament any Consumer who can resume
normal contractual payments may leave the Debt Review by applying to the Debt Counsellor for
a Clearance Certificate. Here certain issues need to be clarified, namely:
a. Does this mean that repayment has to be up to date in terms of original credit
agreement?
b. Does the relevant credit agreement have to be restructured back to reflect the
original contractual instalments? and, if so,
c. What happens if the credit agreement was in arrears at the time the account was
restructured in terms of the debt review proposal?
d. What happens to the above arrears balances when the account is again restructured
back as per the contractual instalments?
e. What about the actual interest rate if this was reduced during Debt Review?
f. What about the term of the contract if this was extended under debt review?
7. Transfer of the Debt Review
Consumers have the right to change Debt Counsellors at any point in time. Likewise, it may be
necessary for a Debt Counsellor to transfer one or more Consumers to another Debt Counsellor.
In addition, some Debt Counsellors are de-registered by the NCR or no longer practice and the
NCR then needs to allocate the affected Consumers to other Debt Counsellors.
The following procedure should be adopted and implemented by all Credit Industry participants
and a standard letter has been developed and has been included in the process (Annexure 1 –
Form 17.7).
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7.1. Consumer initiates a Transfer to another Debt Counsellor (Pre-
Application to Court)
The Consumer could request a Transfer for a number of reasons:
� May move residence and appoint a Debt Counsellor closer to them.
� Could be unhappy with the existing Debt Counsellor.
� Could be unhappy with the transfer of his file from one Debt Counsellor to another.
It must be noted that it is the Consumer that selects Debt Counsellor. A Debt Counsellor can
therefore not unilaterally Transfer a Consumer to another Debt Counsellor without proper
consultation.
The Consumer should request the Transfer in writing and this can be submitted to the old
Debt Counsellor and, should that Debt Counsellor not respond, the Consumer can then
request the new Debt Counsellor to arrange the Transfer.
The old Debt Counsellor is to notify the Credit Providers, NCR, Attorney, the new Debt
Counsellor and the PDA of the Transfer request within five days of receipt of the request
from a Consumer (Annexure 1 – Form 17.7) by selecting the option below:
a. The abovementioned Consumer has requested to be transferred to another Debt
Counsellor with immediate effect. The details of the Debt Counsellor is provided
below:
Should the old Debt Counsellor not have submitted the notification within 5 days, then the
new Debt Counsellor, on receipt of the Consumers’ written transfer request, must:
Notify the Credit Providers, NCR, Attorney, the old Debt Counsellor and the PDA of the
Transfer request within five days of receipt of the request from a Consumer by submitting
the notification (Annexure 1 – Form 17.7) by selecting the option below:
b. The abovementioned Consumer has requested to be transferred to me with
immediate effect. Unfortunately, the previous Debt Counsellor will not issue a Form
17.7 and the details of the previous Debt Counsellor is provided below:
The new Debt Counsellor must complete and fax to DSG(NCR):
� Letter of consent signed by Consumer (include - Surname, Name, Contact number
and Current Status).
� Copy of ID document of the Consumer(s);
� Copy of Form 17.7 notification.
When a Consumer requests a transfer from one Debt Counsellor to another, the Debt
Review process continues and so do the Debt Review time lines. For clarity, no termination
of the Debt Review is taking place during the transfer process, provided the timelines are
adhered to or the Debt Counsellor affected is able to obtain an extension of these timelines.
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7.2. Consumer initiates a Transfer to another Debt Counsellor (Post
Application to Court. Matter not yet heard)
The same process should be followed as outlined in 7.1 above. The Debt Counsellor must
notify the Attorney dealing with the file and, depending on the practice in the particular
Region/Court:
� Provide a Supplementary Affidavit to notify all parties; and/or
� Request that an amendment to the Notice of Motion be affected.
7.3. Consumer initiates a Transfer to another Debt Counsellor (After Court
Order)
The same process should be followed as outlined in 7.1 above.
The old Debt Counsellor should file a notice on the Court file of the request for Transfer.
8. Process for selling or transferring a Debt Counsellor book
A Consumer can be transferred to another Debt Counsellor under the following circumstances:
� The Debt Counsellor could sell his client portfolio.
� The Debt Counsellor could cease practising.
� The Debt Counsellor could resign from the Company and be replaced.
� The Debt Counsellor could pass away.
� The Debt Counsellor could be declared insolvent.
� The Debt Counsellor could be de-registered by the NCR.
8.1. Debt Counsellor Selling/Transferring the Book to another Debt Counsellor
(Pre Application to Court)
The Debt Counsellor must notify the Consumer that he is transferring/selling the book to
another Debt Counsellor and should provide full contact details of the new Debt Counsellor
to the Consumer. The Consumer should be reminded that the Debt Review will continue and
that the transferring of the Debt Review does not terminate the Debt Review.
This letter must be sent to the Consumer 10 days before the Transfer happens.
Where the Consumer does not respond or object to the Transfer to the new Debt
Counsellor, then the process may continue. The Consumer can elect to be transferred to a
Debt Counsellor other than the one that has been chosen by the transferring Debt
Counsellor.
The old Debt Counsellor must complete the notification (Annexure 1 – Form 17.7) and this
would need to be forwarded to all Credit Providers, the PDA, Attorney, NCR and new Debt
Counsellor before the actual Transfer takes place. The old Debt Counsellor or new Debt
Counsellor must select option C (reflected on the Form 17.7) below:
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I confirm that I have transferred/sold my client base which includes the
abovementioned Consumer to the Debt Counsellor mentioned below:
The new Debt Counsellor must complete the notification and fax the following to DSG (NCR):
� Copy of the ID document of the Consumer(s); and
� The notification (Annexure 1 – Form 17.7).
Where bulk transfers do take place then this can be submitted in the form of an excel
spreadsheet or by means of the notification (Annexure 1 – Form 17.7).
On receipt of the bulk notification or Form 17.7, the Credit Provider should, within 10
business days, advise the New Debt Counsellor of the status of the Debt Review application.
This explanation of the status could include and is not limited to:
� If the application is still active.
� If the credit agreement has been terminated from the Debt Review.
� If the client has not been making payments.
� If no proposals have been received.
� If legal action has commenced.
� If legal action has been taken.
� Where applicable, the date on when the timelines are expiring
The Debt Counsellor should then review the information received from the Credit Provider
and then needs to make adjustments and respond to the Credit Providers within 15 business
days (Providing information, submitting new proposals, withdrawing from the Debt Review
etc.).
The Credit Providers will continue to follow their internal processes and could issue a
termination notice whilst the information is being processed by either party. The Debt
Counsellor has 10 business days to respond to the termination notice and should submit the
relative documentation and negotiate with the Credit Provider not to terminate the Debt
Review where this is warranted. Both the Credit Provider and the Debt Counsellor should
negotiate in good faith to reach an agreement that will be in the interest of all parties.
The Debt Review process continues and so do the Debt Review time lines.
8.2. Debt Counsellor Selling/Transferring the Book to another Debt Counsellor
(Post Application to Court - Matter not yet heard)
The same steps as in section 8.1 above are to be followed.
The Debt Counsellor to notify the Attorney dealing with the case and, depending on the
practice in that particular region, the Court may require:
� A supplementary Affidavit signed by the new Debt Counsellor, or
� A change to the Notion of Motion reflecting the new Debt Counsellor’s name.
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8.3. Debt Counsellor Selling/Transferring the Book to another Debt Counsellor
(After Court Order)
The same steps as in section 8.1 above are to be followed.
It is advisable for the Debt Counsellor to file a note in the Court file regarding the Transfer.
8.4. Debt Counsellor stops practicing
This normally occurs when the NCR takes action against a Debt Counsellor and de-registers
the Debt Counsellor or where the Debt Counsellor closes the business down and the
Consumers are left without a Debt Counsellor representing them. The considerations
required in this regard are:
� The state of the book being taken over in terms of documentation and processes
followed under the old Debt Counsellor.
� Whether the Consumers paid the Debt Counsellor Fees and if they made payments
to Credit Providers in terms of proposals submitted to Court or to Credit Providers.
� If Credit Providers terminated where no Court Order is in place.
� The Debt Counsellor system and PDA that the previous Debt Counsellor used.
8.5. Debt Counsellor stops practicing (Pre Application to Court)
In these cases the NCR will intervene and provide the new Debt Counsellor and Credit
Providers with a letter confirming that the Debt Counsellor is no longer practising and that
they have requested the new Debt Counsellor to take over the book.
The NCR appointed Debt Counsellor must notify the Consumer in writing of the transfer and
the reason and should provide full contact details to the Consumer.
The NCR appointed Debt Counsellor must complete Form 17.7 or provide an excel bulk
transfer list and this would need to be forwarded to all Credit Providers, the PDA, Attorney
and NCR together with a copy of the NCR letter.
Where the Debt Counsellor has been requested by the NCR to take over these Consumers,
then the New Debt Counsellor should select option D (reflected on the Form 17.7) below:
I confirm that I have been requested by the NCR (see letter attached) to take over
the abovementioned Consumer from the Debt Counsellor mentioned below:
The NCR appointed Debt Counsellor must complete and fax to DSG (NCR):
� The NCR Letter confirming the Transfer.
� As this relates to a bulk transfer an excel spreadsheet under cover of a Form 17.7 to
DSG (NCR).
On receipt of the bulk notification or Form 17.7 the Credit Provider should, within 10
business days, advise the New Debt Counsellor of the status of the Debt Review application.
The explanation of the status could include and is not limited to:
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CIF - Sub Committee recommendation to CIF
� If the application is still active.
� If the credit agreement has been terminated from the Debt Review.
� If the client has not been making payments.
� If no proposals have been received.
� If legal action has commenced.
� If legal action has been taken.
� Where applicable, the date on when the timelines are expiring
The Debt Counsellor should review the information received from the Credit Provider’ and
then make adjustments and respond to the Credit Providers within 15 business days
(Providing information, submitting new proposals, withdrawing from the Debt Review etc.).
The Credit Provider’s will continue to follow their internal processes and could issue a
termination notice whilst the information is being processed by either party. The Debt
Counsellor has 10 business days to respond to the termination notice and should submit
the relative documentation and negotiate with the Credit Provider not to terminate the
Debt Review where this is warranted. Both the Credit Provider and the Debt Counsellor
should negotiate in good faith to reach an agreement that will be in the interest of all
parties.
8.6. Debt Counsellor stops practicing (Post Application to Court)
The same steps as in section 8.1 above are to be followed.
Debt Counsellor to notify the Attorney dealing with the case and depending on the practice
in that particular region the Court may require:
� A supplementary Affidavit signed by the new Debt Counsellor, or
� A change to the Notion of Motion reflecting the new Debt Counsellor’s name
� Copy of NCR letter.
8.7. Debt Counsellor Stops practicing (After Court Order)
The same steps as in section 8.1 above are to be followed.
No update is required at Court to reflect the change of Debt Counsellor.
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CIF - Sub Committee recommendation to CIF
Annexure 1
Form 17.7
To the Credit Department: 0 (0)
#N/A
From: Name of DC Registered Debt Counsellor. Registration number NCRDC0000 Address Address Address Address Telephone:
Facsimile Number:
Date: 2/25/2011 10:55
Names of Consumer (s): Account Number: 0
ID Number (s) of Consumer (s): This notice serves to advise you that:
Name of new Debt Counsellor:
Telephone Number: Faxsimile Number:
Name of old Debt Counsellor:
Telephone Number: Faxsimile Number:
Name of new Debt Counsellor:
Telephone Number: Faxsimile Number:
Name of old Debt Counsellor:
Telephone Number: Faxsimile Number:
Signed at Little Falls on this 25 Day of February of 2011
Debt Counsellor……………………………………….
a. The abovementioned Consumer has requested to be transferred to another Debt Counsellor with immediate effect. The Details of the
Debt Counsellor are provided below:
DC Name
Registered Debt Counsellor. Registration number NCRDC00000000
NOTIFICATION TO ALL CREDIT PROVIDERS AND ALL REGISTERED CREDIT BUREAUS
unknown
b. The abovementioned Consumer has requested to be transferred to me with immediate effect. Unfortunately the previous Debt
Counsellor will not issue a Form 17.7 and the details of the previous Debt Counsellor are provided below:
c. I confirm that I have transfered/sold my client base which includes the abovementioned Consumer to the Debt Counsellor mentioned
below:
d. I confirm that I have been requested by the NCR (see letter attached) to take over the abovementioned client from the Debt Counsellor
mentioned below: