Debt Review Expressions Explained:
When you speak to a Debt Counsellor they may say that they want to send you a “Form 16“. What is this strange form and why is it important?
The National Credit Act (NCA) has a bunch of official forms and documents that get used for granting credit and helping people through debt review. One of these forms is called Form 16 (you guessed it, the forms are numbered and this happens to be the 16th one).
‘Form 16 is an application form. The form helps consumers apply to a Debt Counsellor for debt review’
Form 16 is an application form. The form helps consumers apply to a Debt Counsellor for debt review. It is the first official step in a process of trying to get help with one’s debt problems with the help of a Debt Counsellor and the Courts.
What’s In A Form 16?
The Form 16 asks for information about:
Your household income
Your monthly obligations
The form also includes some very general information about debt review.
Most consumers know a lot of this information and they should be able to provide most of this information, perhaps with a little checking. There may be some information that you are unaware of and the Debt Counsellor will be able to find out for you later.
Debt Counsellors, credit providers and the Courts have realised that often consumers will not have all the information or they may have guessed some figures incorrectly. This is then addressed when the Debt Counsellor does the formal debt review. At this point, the Debt Counsellor will figure out if the consumer (1) needs and (2) qualifies for debt counselling.
By filling in the form and signing the application this begins the legal process of debt review as per the National Credit Act. The Debt Counsellor then has certain time frames they have to stick to, to render assistance to the consumer.
Did you Know:
A Form 16 is Not A Contract
It is important for consumers (and Debt Counsellors) to realise that a Form 16 is an application document and not a contract. Just because you fill in the form it does not mean that you qualify for debt review. Even though many Debt Counsellors add information about their rates or include documents called a Power of Attorney (POA) this additional information does not miraculously transform the application document into a contract.
‘It is important for consumers …to realise that a Form 16 is an application document and not a contract’
As per the Consumer Protection Act, a contract should set out what services the Debt Counsellor will and won’t do for you.
It should also set out the cost of their services. This is important since there is no regulated cost of debt review (at present). Each Debt Counsellor can set their own rates. There are some industry norms and suggestions from associations and the National Credit Regulator but these are not binding. So, your contract should define these costs for you (including information about the legal side of the process as well).
If you are just beginning the debt review process be sure to ask your Debt Counsellor for a contract once you have completed, signed and sent in your application Form 16.
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