Debt Review
Information Pack
Version 4
First National Bank - a division of FirstRand Bank Limited. An Authorised Financial Services and Credit Provider (NCRCP20).
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Introduction
The Debt Review Process
A high level overview of the debt review process is as follows:
Start of debt review
Need to know
Debt counsellor
Consumer
Debt counsellor
Debt counsellor
FAQs
Consumer’s financial position is to be
reviewed annually by the debt counsellor
Debt counsellor notifies credit providers
and credit bureau via form 17.1
Important numbers
The process is finalised by the granting
of a debt rearrangement order
Consumer
Debt review
Debt counsellor issues a clearance certificate
when debt is settled
Consumer approaches a debt counsellor
Consumer may not incur any further debt
(credit agreement or use overdraft / credit
card) unless it is to consolidate debt
Important time lines
Debt Counsellor
Matter is set down in court by the debt
counsellor (credit providers may oppose the
matter in court if agreement is not reached)
Consumer
Consumer ensures that credit providers
receive regular monthly payments as agreed in
terms of an accepted proposal (or debt
rearrangement order when granted) to
avoid termination
Debt counsellor must submit a Form 17.1 to all
credit providers within 5 business days (excluding
Saturdays, Sundays and public holidays) from date
of application.
Credit provider
Credit providers must provide certificate of balance
to the debt counsellor within 5 business days to the
debt counsellor after receipt of the Form 17.1 .
Debt counsellor
Debt counsellor confirms to credit
providers whether consumer is
over- indebted or not
Debt counsellor
Payment Distribution Agent
Payment Distribution Agent distributes
funds in terms of the payment plan (or debt
rearrangement order when granted) to
credit providers
Credit providers issue a certificate of
balance to the debt counsellor
Consumer
Consumer commits to a payment plan and makes
monthly payments to Payment Distribution Agent (PDA)
It is imperative that lifestyle changes are made in order to make a success of the debt review process.
If consumer is over-indebted, debt
counsellor and credit providers enter into
payment negotiations
Introduction
Need to know
Debt review
FAQs
Important numbers
What you need to know
Credit Agreement Exclusions: A credit agreement may be
excluded from debt review if:
• It is in the name of a juristic person (e.g. company / closed
corporation / trust with more than two trustees, etc);
• If a section 129 (1)(a) notice has been delivered on the credit
agreement prior to the application for debt review;
• Or legal action was taken. Examples of legal action is:
Section 129(1)(a) notice / Summons / Default
Judgment / Attachment:
A section 129(1)(a) notice is drafted and delivered to the
consumer’s chosen domicilium address or last known address by
the credit provider via the method chosen in the credit agreement,
mostly via registered mail, if the consumer is in default under a
credit agreement as is required by the NCA. This is a requirement
before the bank is able to approach a court to enforce its rights
under the credit agreement.
Credit bureaus:
• Your debt counsellor will notify all credit bureaus that you have
applied for debt review and that you have been found over-indebted.
• If you voluntarily withdraw from debt review (before a debt
rearrangment court order has been granted) or when a clearance
certificate is issued (all your credit agreements are paid in full) your
debt counsellor will send an update to the credit bureaus.
Credit card reward offering:
• While under debt review you may not utilise your credit card(s) or
incur any further credit. By default you will therefore not qualify to
earn eBucks and also not access other value added services
(e.g. slow lounge, cashbacks, etc. on your credit card(s).
• Please note all value added benefits and rewards provided to you
by FNB Credit Card, including Automatic Debt Protection, will be
suspended and no claims against these will be honoured.
The same applies should you avail of any premium paying
insurance product such as Top Up debt protection and
Outstanding Balance Assurance (OBA).
Debit orders / payroll deductions
• Debit orders and payroll deductions will not automatically be
cancelled. Please submit a signed written instruction to each
credit provider to cancel your debit order(s) / payroll deduction(s)
to avoid unnecessary unpaid debit order fees or payroll
deductions.
• A special Power of Attorney may also be provided by you to
your debt counsellor, authorising the debt counsellor to instruct
FNB to cancel your FNB credit agreement debit orders / payroll
deductions.
• In the event of a joint (with more than one account holder or
consumer) account, please ensure that all account holders /
consumers concerned sign the instruction to cancel the debit
order / payroll deductions.
Introduction
Need to know
Debt review
FAQs
What you need to know continued...
Debit orders / payroll deductions
Payment
• If debit orders are not cancelled, the credit providers will continue
to raise these against your bank account and in the case of
insufficient funds your account will be debited with unpaid debit
order bank fees ,which will increase your outstanding balance.
• Kindly note that FNB can only cancel FNB credit agreement
related debit orders and not those of your other credit providers.
• A stop payment may be placed on your debit orders at your
bank (where your transactional / cheque account is held) at a
nominal fee.
• If regular payment is not received, if late payment is made, if no
payment is made, or if payment is not reasonable, that credit
agreement may be terminated from debt review by the
credit provider.
• In the event of missing or incorrectly allocated payments the
credit provider will require bank proof of payment from your
Payment Distribution Agent or debt counsellor in order for us
to investigate the matter. The credit provider will not be held
reponsible for any fees, charges or interest that has been
generated if the missing payment was as a result of payments
being made to an incorrect account number or using an invalid
reference.
• It is imperative to note that where a debt rearrangement
proposal has been accepted on the basis that payments need to
increase after a period of time, that you ensure that payments
are increased on the due date and in line with any final proposal
acceptance or debt rearrangement order granted. Failure to
do so could result in default and the termination of the credit
agreement from debt review.
• Where possible we will inform debt counsellors regarding the
importance of adhering to payment review dates, but it remains
your responsibility to do so.
• It remains your responsibility to ensure that your credit providers
receive regular payments in terms of your agreements. It is
advisable to maintain payment during the debt review process to
minimise the negative impact of compounded interest, further
fees and charges.
Important numbers
Further credit
• You may not incur any further credit while under debt review,
except to consolidate existing credit agreements, and this only
with the written consent from you, your debt counsellor and the
bank.
• If you incur further credit on a credit facility (e.g. credit card or
cheque with overdraft account) the credit agreement may be
excluded from the debt review process.
Introduction
Need to know
Debt review
FAQs
Important numbers
What you need to know continued...
Proposal
Settlements
• Your debt counsellor will submit a debt rearrangement proposal
to your respective credit providers to negotiate a reduced
payment and extended repayment term. The credit provider is
not obligated to accept the proposal. If no resolution is reached,
the matter may be argued in court and the court will make a
final ruling. The payment proposal needs to include repayment
towards interest, fees and charges as well as capital reductions.
• Debt rearrangement proposals may be submitted to the credit
providers via the Debt Couselling Rules System (DCRS) or
outside of DCRS. The DCRS is based upon industry agreed rules
and principles.
• Applying for debt counselling should not be seen as an
opportunity to avoid payment obligations under a credit
agreement. The funds lent to you remain due and payable
by you and it would be in your best interest to maintain
reasonable payments.
• You may settle a credit agreement at anytime during the
debt review process upon receipt of a settlement figure from
our offices.
• A paid up letter may be requested and will be provided upon full
and final settlement.
Refunds
• If a refund (for a debit order, payroll deduction, SARS refund, etc)
is required for any particular reason, your debt counsellor will need
to send the credit provider a request for consideration along with
your banking details. In the event that the refund must be paid
to a non-FNB account, we will require either a copy of your bank
statement or a letter from your bank confirming your banking
details.
Termination
• A credit provider may terminate a credit agreement from the
debt review process if you are in default of the credit agreement
and 60 business days have passed since you applied for debt
review. A credit provider may then institute legal action. All the
terms and conditions of the original credit agreement remain in
full force and effect.
• Your debt counsellor and the National Credit Regulator will
be notified of your default either via registered mail or their
preferred method of communication.
• You will be notified of your default via registered mail sent to your
last known domicile address.
• If you are found to have defaulted in terms of a debt rearrangement court order the account will automatically be
terminated without any notification and a credit provider will
resume with enforcement action outside of debt counselling.
• However, in the event of default, we may make contact with you
to advise you of same and request payment before proceeding
with enforcement action.
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Introduction
Need to know
Debt review
FAQs
Important numbers
What you need to know continued...
Transfer
Voluntary withdrawal
• You may transfer to another debt counsellor at anytime in the
process. The credit provider will however require the necessary
supporting documentation from your debt counsellor advising of
the transfer.
• Kindly note that your debt review process does not start afresh
upon transferring to a new debt counsellor, but continues
uninterrupted. Any credit agreement(s) that may have been
terminated will therefore remain terminated and any proposal
agreed to or debt rearrangement court order granted will be of
full force and effect.
• Upon receipt of the necessary supporting documentation we will
amend your records to indicate that you have exited from the
debt review process.
• Please note that your pre-existing credit facilities (e.g. overdraft,
credit card, etc.) will not automatically be reinstated. A new credit
application will need to be submitted for credit assessment.
Voluntary withdrawal
• Prior to the granting of a debt rearrangement court order you may
voluntarily withdraw from debt review. Your debt counsellor will
notify your credit providers and the credit bureaus accordingly.
• If you would like to withdraw from debt review after a debt
rearrangement court order has been granted, please note that
the debt rearrangement court order must first be set aside
(overturned) at your cost. Once the debt rearrangement court
order is set aside your debt counsellor will notify your credit
providers and the credit bureaus accordingly. Please note
that you will still be liable for payment in terms of the debt
rearrangement court order until the court order has been set
aside by the court.
Court order:
• A consent order / tribunal order / debt rearrangement order,
vary the repayment terms and instalment due under the credit
agreements and end the debt review process. Such orders do
however not cancel the credit agreement and all rights and
obligations thereto are retained until the outstanding balance has
been settled in full.
• It would be in your interest to ensure that your debt counsellor
contact your credit providers at least 3 months prior to a credit
agreement being paid off to ensure that the credit agreement is
settled in full.
Clearance certificate
On the settlement of all your credit agreements, your debt
counsellor will issue a Form 19 Clearance Certificate to all your
credit providers and the credit bureau.
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Introduction
Need to know
Debt review
FAQs
Important numbers
What you need to know continued...
Change in Circumstances
Monthly Transactional Fees
• Your debt counsellor must be advised of any changes in your
financial position. This will include, but is not limited to, increase
in available income, bonuses, inheritance, retrenchment, SARS
refunds, maternity leave, sickness, death, unexpected medical
expenses and termination of employment.
• In the event of an increase in available income your debt
counsellor will review your repayment proposal to your creditors
and renegotiate a repayment plan.
• If your available income has been negatively impacted for any
particular reason, it is imperative that your debt counsellor
notifies your credit providers of exactly what has transpired
and provide supporting documentation where applicable (e.g.
retrenchment, disability, maternity leave, etc). Please note that
there is no guarantee that an extension or payment holiday will be
granted as each case is assessed on its own / individual merit.
• The monthly fees on your cheque (transactional) account, with
or without an overdraft facility, must form part of your living
expenses. Please ensure that these fees are covered over and
above any proposal amount negotiated with your debt counsellor.
Investment Accounts
• Any available funds in an investment account should be
distributed amongst your creditors to reduce your overall debt.
• If a request is received for the release of any investment funds
in a FNB account, we will require a distribution list from your
debt counsellor along with the banking details of your Payment
Distribution Agent. The funds in question will then be transferred
to your Payment Distribution Agent for distribution to your
creditors.
• SARS refunds will be treated in the same above manner.
Pension Backed Loans
Should you have a loan which is secured by your pension fund
benefit, we require a benefit statement issued by your pension fund
in order to assess your repayment proposal. This statement must be
provided together with the proposal.
Introduction
Guideline to the industry agreed debt review documents
Need to know
Form 16
Application by consumer for debt review.
Form 17.1
Notification to all credit providers and all registered credit bureaus of consumer’s application for debt review.
Certificate of Balance
Certificate issued by credit providers to debt counsellors reflecting a consumer’s total debt exposure and the details thereof.
Form 17.2
Notification to credit providers advising whether a consumer is over-indebted or not.
Proposal
A repayment proposal submitted by the debt counsellor to credit providers for consideration.
Counter Proposal
A credit provider’s counter offer to the debt counsellor if the repayment proposal is unacceptable.
DCRS Proposal
Rework letter is issued if a credit provider does not agree to the debt counsellor’s proposal.
Provisional proposal acceptance is issued by a credit provider when a proposal is provisionally accepted.
Final proposal acceptance is issued by a credit provider when a final agreement has been reached prior to court.
Decline letter is issued by a credit provider if no agreement has been reached after a rework letter has been issued.
Form 17.3
Notification from the debt counsellor to the credit providers advising of a change in a consumer’s financial position.
Debt review
FAQs
Important numbers
Introduction
Guideline to the industry agreed debt review documents...
Need to know
Debt review
FAQs
Important numbers
Form 17.4
Notification from the debt counsellor to the credit providers of a consumer ‘s voluntary withdrawal from debt review.
Form 17.5
Notification from the debt counsellor to the credit providers if they have not received a response to their repayment proposal.
Form 17.7
Notification from the debt counsellor to the credit providers of a consumer’s transfer from one debt counsellor to another.
Notice of Motion
Court document specifying when a matter will be heard in court.
Court order
A debt rearrangement or a tribunal order granted in court to finalise the repayment arrangements; and / or
An order stating that the initial court order has been set aside overturned or amended.
Form 19
A clearance certificate issued by the debt counsellor upon clearance of all the consumer’s outstanding debt.
Introduction
Need to know
Debt review
FAQs
Important numbers
The impact of debt review on your FNB accounts
FNB Private Clients / FNB Wealth Accounts
• If you are not using your cheque / transactional / savings account,
please approach your FNB / Wealth branch and request the closure
of the account in order to avoid unnecessary bank fees.
• In order to avoid unpaid fees please ensure that all your debit
orders are cancelled with your respective credit providers, other
financial institutions and service providers. You may also want to
consider placing stop payments on these debit orders with your
bank at a nominal fee.
• Credit insurance (life and asset) premiums will remain payable and
provision must be made for same in any repayment proposal. If the
payment of premiums are not made the relevant policy will lapse,
this means that you will no longer have the protection offered by
the credit insurance.
FNB Transactional Accounts (for example Cheque
Account, Smart Account and Mzansi Account)
• Your account will continue to generate monthly bank fees until the
account is closed.
• If you are not using the account and there is no Smart Device, Temp Loan
or Revolving Loan connected to the cheque account, please approach
your FNB branch to request the closure of the account in order to avoid
unnecessary bank fees.
• Should you require duplicate statements, these may be requested from
your FNB branch at a nominal fee or obtained online or via an ATM.
• You may continue using your account to deposit your monthly
income, but need to bear in mind that the account(s) attract monthly
transaction and account fees, which must please be covered at all times.
Please also note that the terms of conditions of the cheque account
remain in force.
FNB Cheque Account with Overdraft
• Your account will continue to generate monthly transaction, account fees
and interest until any amount owing is settled and the account closed.
• The outstanding balance on your cheque / overdraft account is
automatically frozen at the amount of the overdrawn balance on the date
that your debt review application is received and a certificate of balance is
issued by the bank. Example: If you have an overdraft facility of R10 000
and at the time of applying for debt review your outstanding balance is
R8 000, then your overdraft limit is automatically capped at R8 000.
If your cheque account was in credit at the time then the overdraft limit
will be cancelled entirely.
• In order to avoid unpaid debit order fees please ensure that all your debit
orders are cancelled with your respective credit providers, other financial
institutions and service providers. You may also want to consider placing
stop payments on these debit orders with your bank at a nominal fee.
• Any deposits received over and above your debt review payment to your
overdraft account will automatically reduce the outstanding balance.
• If no deposits are received within a 30 day period the account will
automatically become inactive. If no deposits are received after a 180
day period the account will automatically become dormant and any
deposits to the account will be rejected. In the event that this occurs
please contact the FRB Debt Review Centre in order for the account to
be reactivated.
• If you do not intend to utilise your account in future once you have
settled your overdraft facility and there is no Smart Device, Temp Loan or
Revolving Loan, please approach your FNB branch and request the closure
of the account in order to avoid unnecessary bank fees.
• Your account number may change during the debt review process. Kindly
note however that in the event of a change in account number, we will
advise you and your debt counsellor of this change.
• In the event that you withdraw from the debt review process, please note
that your overdraft facility will not be reinstated. A new credit application
will need to be submitted for credit assessment.
Introduction
Need to know
Debt review
The impact of debt review on your FNB accounts continued...
FNB Cheque Account with a Smart Device
• We will advise your debt counsellors of the Smart Device and
request that allowance be made as part of your living expenses to
cover the repayment of same. It is important that payments are
kept up to date without fail.
FAQs
FNB Cheque Account with Revolving Loan
Important numbers
• As per your credit agreement a monthly fee of R40.00 will be
charged to your cheque account for the Revolving Loan facility.
• Please note that the Revolving Loan is repaid via debit order, a stop
payment must be placed on the debit order upon receipt of the
final rearrangement proposal or court order, in order to avoid any
unnecessary bank charges.
FNB / Clicks / Discovery / Kulula / Vodacom Credit
Card:
• Your credit card facility / facilities will automatically be revoked
(credit limit will be R 0.00) and your credit cards will not be
reissued when you apply for debt review.
• Your credit card account number may change during the debt
review process. Kindly note however that in the event of a
change in account number, the respective credit card account
numbers are interlinked and therefore payment may be made to
any of the credit card account numbers.
• In the event that you voluntarily withdraw from the debt review
process please note that your credit card facility and credit limit
will not be reinstated. A new credit application will need to be
submitted for credit assessment.
FNB One Account:
FNB Cheque Account with a Temp Loan
• Payments for your Temp Loan must be made via your cheque
account.
• A savings / transmission / transactional account will need to be
opened at your FNB Branch for your salary / salaries and daily
living expenditure.
• In order to avoid unpaid debit order fees please ensure that
all your debit orders are cancelled with your respective credit
providers, other financial institutions and service providers. You
may also want to consider placing stop payments on these debit
orders with your bank at a nominal fee.
• You may not make use of your One Account credit facility while
under debt review.
Introduction
Need to know
Debt review
FAQs
Important numbers
The impact of debt review on your FNB accounts continued...
FNB Home Loans / FNB Smart Bond (Housing Finance):
• In the event that a consumer is married in community of property,
a joint debt review application must be submitted, thus both
spouses must apply for debt review.
• In the event of joint bonds (where is more than one consumer
liable for the same mortgage agreement):
• If the debt review joint bond holder and the non-debt
review joint bond holder is capable of paying 100% of the bond
instalment (as well as a portion of the arrears, if applicable) as
per the original mortgage agreement, the mortgage agreement
will be excluded from the proposal (not restructured) and
included as a necessary living expense.
• If the consumers (debt review and non-debt review joint bond
holder) are living together, the contribution of each party to
the joint household (bond repayment and living expenses)
must be taken into consideration when the affordability
assessment is conducted and the debt rearrangement proposal
is drafted by the debt counsellor.
• If the home owner’s insurance premium (for the property) is
paid via the home loan account: Upon renewal of the policy, an
arrangement must be made directly with the insurance company
for payment of the premium, as same will not be paid from the
home loan account. The insurance remains a requirement of the
home loan and must be maintained. Failure to do so is a breach of
the agreement.
• Any Flexibond facility will automatically be cancelled upon applying
for debt review and should you later withdraw from the debt review
process you will need to be reassessed (upon application) for a
flexi facility.
FNB Personal Loans / Smart Spend Loan
• Your credit agreement account number may change during the
debt review process.
Introduction
Need to know
Debt review
Frequently asked questions
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May I make additional payments to my credit agreements?
Yes, you may.
FAQs
If I want to voluntarily withdraw from debt review and my debt counsellor has deregistered,
who can assist me?
Important numbers
You may contact the National Credit Regulator on telephone number 0860 627 627 for assistance. They will provide your credit providers with
a letter with their findings. We will also require a signed letter from you stating that you have voluntarily withdrawn from the debt review process.
If however, there is a court order in place, you will be required to have the court order set aside at your cost. The interest rate, fees and charges
concession which applied during debt review will no longer be applicable in this regard.
What happens if I can no longer afford to maintain payment in terms of the granted court order?
You need to inform your debt counsellor who will need to apply to court for an amendment of the court order. Kindly note that you will need to
continue making payment in terms of the initial court order until such time that the amendment is granted by court.
If a credit agreement has been terminated can it be reinstated under debt review?
We will consider reinstating a credit agreement on a case-by-case basis depending on the circumstances.
In the event that I have voluntarily withdrawn from debt review and wish to make a payment arrangement who do I
contact?
You may contact the credit provider directly to make an arrangement.
Introduction
Need to know
Debt review
FAQs
Important numbers
Important numbers
FRB Debt Review Centre
Telephone Number: 087 730 1166
Email address:[email protected]
Fax: 0860 117 532
National Credit Regulator
Telephone Number:
0860 627 627
Website:www.ncr.org.za
Banking Ombudsman
Telephone Number:
0860 800 900
Website:www.obssa.co.za
Credit Ombudsman
Telephone Number:
0861 662 837
Website:www.creditombu.org.za
National Consumer Tribunal
Telephone Number:
012 683 8140
Website:www.thenct.org.za
LEGISLATION TO PROTECT YOU
The applicable legislation aimed at protecting you as a consumer is
the National Credit Act 34 of 2005 (NCA). Should you require a copy
of the NCA, please visit
www.acts.co.za or www.ncr.org.za.
Contact details for FNB complaints:
Telephone Number:
011 369 1115
Email address:[email protected]
Website:www.fnb.co.za
Collection Departments:
FNB Credit Card Collections
Telephone Number:
0860 112 011
FNB Home Loan Collections
Telephone Number:
0860 334 455
FNB Smart Bond (Housing Finance) Collections
Telephone Number:
087 311 6664
FNB Loans Collections
Telephone Number:
087 577 4103
CBS Risk Management (Overdrafts / Revolving Loans /
Temporary Loans / Smart Devices)
Telephone Number:
087 577 4000