Reading Time: 2 minutes

NCR Guideline on Withdrawing changes Form 16

The form that Debt Counsellors give to consumers investigating debt review is called a Form 16. This form helps Debt Counsellors to gather needed info about the consumers situation and debts. It also has a section setting out the fees and terms and conditions of debt review (note it is not a contract document and is only an application form). In line with the recently published NCR Guidelines for the Withdrawal from Debt Review some additional information now needs to be added to Debt Counsellors Form 16s (and to their contracts as well). The new information relates to consumers right to pay credit providers directly and not via a PDA (as further set out in the some to be in effect NCAA and new Regs).

Form 16

According to the NCR the following information relating to election to make direct payments to creditors should be included in the Form 16 signed by the consumer when they apply for debt review:

i. Consumer remains responsible to make all payments as re-arranged, in full and on time.
ii. Proof of payments must be sent to the debt counsellor on a monthly basis for record
keeping and to enable provision of after care service as a consumer cannot be under debt
review without a debt counsellor.
iii. Consequences of making short or late payments(e.g. risk of termination by credit providers)
iv. Debt counselling fees are payable to a debt counsellor for services rendered and this
includes payment of aftercare fees.
v. For a debt counsellor to issue a clearance certificate, all after care fees must be up to date.
Where the debt counsellor has suspended provision of service, a consumer must provide proof of settlement letters from credit providers for a debt
counsellor to issue a clearance certificate

It is clear that, though it might save the consumer some funds, it does require a bit of work on their side, good record keeping and paying the right amount each month as per the plan on time. This is tricky as proposed monthly debt repayment amounts (as set out in the court documents) shift on a regular basis as time goes by. Consumers woudl need to stick to the payment plan each month to ensure that things work according to the court order.

Debt Counsellors will now want to make sure their Form 16 now is aligned with these changes to the NCA and NCAA2014 & Regs.