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.


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


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


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.


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.


(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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(After Court Order)


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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� 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)


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)


No update is required at Court to reflect the change of Debt Counsellor.

15


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:


Name of new Debt Counsellor:


Name of old Debt Counsellor:


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:

withdrawal from debt review after sub - debt...

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