for unsecured debt, auctioneers only come in after the debtor is sued;-
There are three different modes of execution- committal to civil jail, attachment of 1/3 salary or attachment of moveable property-this is where auctioneers come in.

The litigation process is very long and takes at-least an year to get to the point of Auction, the debt also needs to be worth the hustle and the bank has established that unwillingness to pay is the reason for default.

Just tell her to explain to them her situation and request them to stop interest on that basis and give her some time for situation to improve,

On the crb issue the name remains there for 5 years but as long as you've cleared it has no consequence, people default for various reasons like in her case its reasons beyond her control and remember banks are in competition. The last time i checked only stanch-art had an issue with your name being in crb and you had to wait 6 months after clearance to apply for a facility