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Debt Review Removal in South Africa: How Legal is it?

The feeling of your finances shackled by a poor credit score, or crippled by debt, is one of the most defeating emotions. It's a situation that feels bleaker than words can describe, like a weight you'll never shed. The pandemic has left millions of people in financial ruin.

Are you living in South Africa and suffering from this issue, or are you on the road to recovery? Then there might be legal recourse for you to follow for debt review removal.

With courtesy of the credit experts here, we can go through the facts. Read on to find out about the legal status of debt review. We'll soon find out if there's any light at the end of that financial tunnel.

What is Debt Review in South Africa?

When under extreme financial duress, it's no surprise if events go by too fast to take your time making decisions. Depending on how compromising the situation was, the only available option at the time may have been a debt review.

Debt review has its advantages, like not ending up on a blacklist. You also receive assistance in managing your debt, which can be an enormous relief.

Entering a debt review or debt counseling is legal, becoming law in 2007. It's been a boon for some people who would have found no other way out of debt.

What was once much-needed assistance can become unnecessary as your circumstances change. People who have managed to get back on their feet may be questioning whether they need to be under debt review.

You could always wait out the debt review or pay off the debt faster, but this may be inconvenient. You might be in a stable financial position and need to take out more credit. Due to debt review, you'll have your hands tied.

Debt review removal. How to Cancel Debt Review in South Africa?

Debt review itself may be a well-established practice but removing yourself from the process is a different story. It's not as simple as ditching your financial assistance or unsubscribing from a service. It's a complicated legal process.

With that said, a point to focus on is that it is a legal process. It's also a complicated one and will involve contacting a registered debt counselor and appearing before a magistrate to appeal for the review listing removal. It's a lot of documentation to get in order and potential expenses. Your best bet would be to contact a qualified debt counseling service to discuss your options. The National Credit Act introduced debt review as a debt relief option for overindebted consumers. Debt counsellors are the only ones who can conduct this statutory process.

Getting rid of a debt review indicator is becoming increasingly difficult lately. There is an additional step that you need to take to complete your debt review process or even cancel it early, and unfortunately, it is not something that you will be able to do on your own. In this case, an attorney will be necessary. Fortunately, we can help.

To terminate the debt review process and to have the debt review indicator removed from your credit reports requires that a court application is made in court. It will be necessary for the courts to determine that you are not over-indebted. If there is no court order for your debt review, you still need to go through this process.

Debt review indicators: what do they mean?

When you have been approved under the debt review process and/or have been deemed overindebted, your debt counsellor will contact all the credit bureaus in South Africa to notify them of your application. While you are undergoing the debt review process, your profile will reflect as currently under debt review, which prevents you from taking on any further debt.

The debt review indicator and debt review flag help you stay on top of your finances and assist credit providers in identifying overindebted consumers. Keeping on making more debt would make getting out of debt extremely difficult. Due to this, you should avoid debt while you are under debt review. This article discusses when and how debt review indicators can get removed.

First step: Check if your name is under debt review?

Examining your credit report will reveal whether your name is under review. You can obtain your credit report from any major credit bureaus, such as Experian, TransUnion, Compuscan, and XDS can provide you with your credit report. An under-debt review notification will appear in your credit report. We have an online credit bureau report requesting a service which provides you with a comprehensive credit report from all four bureaus in one easy step. Click here to request our comprehensive 4in1 credit report.

Debt Review Removal with no granted court order

You can end the debt review process and remove the debt review indicator if your financial situation is stable to the point where you can repay all your outstanding minimum payments. Considering that you are no longer over-indebted and would be able to repay your accounts directly and not need help from a debt counsellor, listing you as under debt review would be unfair and counterproductive.

To complete the debt review removal procedure, you must obtain a court order to be declared no longer over-indebted. Once the court grants the order, the credit bureaus will get a notification that the court order has been successful and that you are no longer over-indebted. The bureau will remove the debt review indicator from your credit report.

Debt review removal Timeframe - All debt paid in full

The debt review flag will appear on your credit profile with all bureaus until you have paid off the entirety of your debts and are current with your bond payments.

After settling all your creditors, your debt counsellor will issue you a clearance certificate indicating your debt review completion. After receiving notification from the National Credit Regulator, your name will be cleared from the credit bureaus within seven days. The sooner you pay off every one of your debts, the sooner the debt review indicator will get deleted from your name.

Debt Review removal process. Debt is still outstanding.

The court ruled in Rougier v Nedbank that any conduct by a debt counsellor that will result in the termination or withdrawal of debt review will act outside the statutory powers conferred by the Act on debt counsellors and is therefore prohibited.

This court decision led to the issuance of the National Credit Regulators' withdrawal from debt review guidelines and the introduction of form 17. W. Removal of the debt review indicator is only allowed in the following situations:

You opted out of the debt review process before your debt counsellor issued Form 17.2 to creditors.
You obtained a court order declaring that you are no longer over-indebted.

Only the above two situations would result in the removal of the debt review indicator. When your debt counsellor issues form 17.2, you will still need a court order to declare that you are not over-indebted before the debt review indicator gets removed.

Debt counselling cancellation through the courts

A consumer can apply to a court to get declared not overindebted. It is best to speak to an attorney about the formalities of making an application since errors can lead to the application failing or postponements that could get avoided.

As such, a consumer can employ the services of an attorney to attend to the court application to terminate the debt review process. You need not be present at court if you use the services of an attorney to apply for the termination of debt review. The attorney will still need your assistance, typically in the form of providing documents and information as required. Once the court application has taken effect, the consumers' credit report will get updated with the various credit bureaus. This court order will remove the debt review indicator.

Debt Review Removal or Stable Payments

Remember that debt review removal isn't always the best option. Keeping yourself far away from endangering your credit score is always a safe bet and is even more true if you've already had financial issues.

By consulting an expert, you paint a clear picture of the best choice

If it's a qualified professional you're looking for to answer any more of your questions, we're happy to field your concerns at Credit Salvage. It's easy to contact us, and with just a single click you can find out about the best strategy to handle your debt.

So, apply for our credit clearance application to start getting out of debt today or to apply for our debt review removal program.

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