Debt Review Expressions Explained:
What is a Form 17.2?
The Form 17.2 is a document used by Debt Counsellors to let a consumer’s various credit providers know that they have now been accepted (or rejected) for debt restructuring through the courts (commonly referred to as debt review).
‘The Form 17.2 is a document used by Debt Counsellors to let a consumer’s various credit providers know that they have now been accepted (or rejected) for debt restructuring through the courts’
The form will have the consumers’ name and ID number and the details of the Debt Counsellor. This form is only sent after the Debt Counsellor has had a good look over the consumer’s debt situation (once they have conducted a debt review or a review of the consumer’s total debt and income situation).
The form will indicate one of two things:
(1) ACCEPTED: The consumer has not only applied for debt counselling and a debt review, but now that the review has been done the consumer appears to be over indebted (or will soon be over indebted) and will be going ahead with the debt review process. This means they will be heading to the local courts to ask for a court order restructuring how they pay their debts each month.
(2) REJECTED: The form will indicate that even though the consumer applied for a review of their debt (and some help from a Debt Counsellor with their budgeting) they will not be going ahead with the court process.
Accepted – Now What?
Once your Debt Counsellor has reviewed your debt and seen that you are in financial difficulty (or going to experience serious problems soon) and said that you appear to be over indebted, they will begin to negotiate with creditors.
READ MORE: What Does It Mean To Be Over Indebted?
First, they will send the Form 17.2 to the credit providers and then they will send a proposal of how they feel all the different debts will best be settled. The credit providers will respond and that information will be given to the court in your court application.
At Court, the magistrate will then look over your income and debt figures (and the repayment proposal) and make a court order saying that you are actually over indebted and restructuring your debt* to something you can realistically cope with each month.
Rejected – Does This Ever Happen?
Sometimes consumers just need a little budgeting advice and planning to help them deal with their debt situation. If this is the case then they do not really need debt review. So their application could be turned down. There is no point in the consumer entering debt review.
‘Sometimes consumers just need a little budgeting advice and planning to help them deal with their debt situation’
If your application to the Debt Counsellor to be accepted for debt restructuring has been turned down and you think this is incorrect then consumers have the right to take the matter directly to the court and make a private application to a Magistrate. This can be done on your own or with the help of an attorney. Sometimes the same Debt Counsellor who did the evaluation will also be willing to help you fill in the right forms (even though they think you don’t need debt review) to start this process.
The Court (Magistrate) will then be able to look over your figures and make a discussion that you are (or aren’t) in need of debt restructuring and the full debt review process. They can then help you organise for the Debt Counsellor to assist you with the process if they feel you need it.
‘having an application for debt review turned down seldom, if ever, happens’
It is worth mentioning that this (having an application for debt review turned down) seldom, if ever, happens. Most Debt Counsellors are very happy to help financially troubled consumers make arrangements with their credit providers. This provision in the National Credit Act is more of a technical safety net built in…just in case. It has hardly ever been used though.
It is also true that most people will not apply for help through debt review if they do not actually feel financially stressed and are not really struggling to pay all their debts and make ends meet. So, applications for debt review are almost never turned down.
Get A Copy
It is important that if you apply for debt review you get a copy of this form 17.2 to show that you were or were not accepted for debt review. It is very important that you keep a copy of the form in a safe place (digitally and one in print too).
‘This form can help a lot when you are contacted by any collections people once the debt review process has started’
This form can help a lot when you are contacted by any collections people once the debt review process has started. You will be able to send them a copy of this form and it will have the contact details of your Debt Counsellor on it so that they can make contact with them instead.
So, be sure to ask your Debt Counsellor for a copy of your Form 17.2.
READ MORE: How Does Debt Review Work?
*unless the Magistrate does the math and decides you are not over indebted and can actually afford to repay your debts normally without debt review.