How to Cancel Debt Review and Clear Your Credit Records

CLICK TO APPLY NOW TO REMOVE DEBT REVIEW FROM YOUR CREDIT REPORTS

All queries are responded to in writing within 24 – 48 hours.

Or find out more here: 

A Summary of How To Cancel And Remove Debt Review

If you want to remove the debt review notice from your credit records, and you still have outstanding accounts, a court order must be obtained to terminate the debt review process. A court order to cancel debt review is an order granted by a magistrate to notify credit providers and the credit bureaux that a court has cancelled the debt review process and confirmed that you are no longer over-indebted. The credit bureaux and credit providers alike must then remove the debt review notification from your credit records.

The debt review cancellation court application must show you are able to revert to paying the original contractual monthly amounts that you were paying before the debt review process. Once you terminate debt review, creditors may also demand that you make payment of the original contractual amounts if your debt is still enforceable and has not prescribed. Note: debt prescribes when payments are not made for a continuous period of 3 years and the creditor has not issued summons. (click here for more information on prescription)

You do not have to attend court when the application is presented to court, as attorneys familiar with these types of applications represent your case on your behalf.

THEREFORE:

  • To cancel debt review, a court application is necessary.
  • You must be able to show that you are no longer over-indebted.
  • If any accounts are prescribed, the court needs confirmation from the creditor, or you must show you can afford to pay the account/s in question.

You could be under debt review either with a Magistrates Court Order, or a Consent Order from the National Consumer Tribunal. However, you can also be under debt review without either a court order nor a Consent Order. Each status requires a different approach.  

Therefore, should you wish to terminate the debt review process, please complete the questionnaire below, to allow us to assess if you have reasonable prospects of success for a court application to cancel debt review and remove the debt review status.

(related blog articles and resouces)

Should you not receive a response withih 24 hours, please contact us as per the following details:

WhatsApp: 065 947 4940
Postal Address: Postnet Suite 459, Private Bag X1, Melrose Arch 2076

I WANT TO REMOVE Debt Review

All about how the Debt Review Cancellation process works: 

Frequently Asked Questions about debt review removal

Q: Do I need to inform my debt counsellor about my cancellation?
Q: Are you going to do everything on my behalf (or will I need to go to court)?
Q: What happens if the debt review flag has been removed and I still can’t get credit?
Q: Because you say it is not necessary to settle my accounts we can start with the process. I was waiting for my debt counsellor to send me my updated balances from my creditors, which I think you will do while in the process correct me if I am wrong?
Q: How will I know how much I need to pay my creditors after cancellation and my creditors won’t summon or add more charges if they see that I am not under debt review anymore. How does the cancellation work when it comes to creditors?
Q: I was of the view that the Debt review exit has been finalised as per the Notice of Withdrawal document that the debt counsellor has given me but I still have the debt review flag on my credit reports. Does it mean that the Debt review is still in force although its withdrawn from Court?
Q: What does the “C” status specifically mean in terms of my current financial standing?
Q: How likely is it that the court will approve my application?
Q: What happens if the court denies the application? Am I still required to pay the full legal fee?
Q: How will the law firm prove that I am no longer over-indebted? Will I need to submit financial statements or proof of income?
Q: Can I cancel the process if I change my mind after the application has started?
Q: What does the timeline look like for receiving updates, and how often will I be informed of progress?
Q: Is there any flexibility with the payment plan if I encounter difficulties during the process?
Q: Are there any other potential costs I should be aware of beyond the legal fees?
Q: If the court outcome is not in my favor, how will this affect my credit report or future options?
Q: Why is it important to obtain a court order to cancel my debt review?
Q: How does the Debt Review Cancellation Legal process work?
Q: I thought I can cancel my debt review process simply upon my request. Why is this matter going to court?
Q: How long does it take to obtain a court order?
Q: Must I continue to pay the creditors whilst the court application to withdraw the debt review has not been finalised?
Q: What is the Legal fee?
Q: What is a court order?
Q: I want to remove my name under debt review but have not finished paying my debt. Is it possible?
Q: I have paid up all my accounts that were under debt review but my credit report still reflects the debt review status. What must I do to remove the debt review status from my credit report?
Q: Please advice on how exiting the debt review prematurely will affect my credit record & do you think I can qualify to get credit finance immediately after exiting debt review?

Q: My debt review was a consent order that was confirmed by the National Consumer Tribunal. Can this be set aside?

1) The right to apply for debt review

The National Credit Act 34 of 2005 introduces debt review as a statutory debt relief measure for over-indebted consumers. If you are over-indebted you can submit an application to a registered debt counsellor for debt review. Hence the process is often referred to as “debt counselling”. Your right to apply for debt review is enshrined in Section 86 of the National Credit Act 34 of 2005. Section 79 in this Act defines “over-indebtedness” as follows:

“A consumer is over-indebted if the preponderance of available information at the time a determination is made indicates that the particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, having regard to that consumer’s—

(a) financial means, prospects and obligations; and
(b)probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer’s history of debt repayment.”

2) The right to terminate debt review

If you are no longer over-indebted and you want to remove the debt review flag from your credit reports, you are able to cancel the debt review process. The National Credit Act 34 of 2005 does not set out how to cancel the debt review process, if you have not settled all the accounts. Before 2015, consumers could withdraw from debt review voluntarily without a court application. This was made possible by the debt counsellor issuing a Form 17.4, at the consumer’s request to cancel the debt review. However, the Form 17.4 is no longer applicable.

In 2015, the National Credit Regulator (“the NCR”) published Withdrawal from Debt Review Guidelines (Circular 002/2015) that acknowledged that the application of this voluntary withdrawal process was overturned by the judgment granted in the case of Rougier v Nedbank (27333/2010) [2013] ZAGPJHC 119 (28 May 2013). In Rougier v Nedbank, the court held that a debt counsellor does not have the statutory power to terminate and withdraw the debt review process. In response, the NCR’s Circular 002/2015 was published to detail the court application process that you must follow to withdraw and remove the debt review flag if you still have outstanding accounts and you are not entitled to a clearance certificate in terms of section 71 of the NCA.

In 2019, the full bench High Court decision of Van Vuuren v Roets and Others (37407/2018) [2019] ZAGPJHC 286; [2019] 4 All SA 583 (GJ); 2019 (6) SA 506 (GJ) (3 September 2019) (“Van Vuuren Judgment”) further cemented the necessity for consumers who are not over-indebted, to apply to court to cancel debt review. The NCR responded in 2021 by publishing the Withdrawal from Debt Review Guidelines (Circular 001/2021) that considered the debt review termination process in light of the Van Vuuren Judgment. In practice, the Van Vuuren Judgment has impacted mostly on consumers with debt review court orders, and now some courts no longer rescind debt review court orders. Where the debt review is not subject to a court order, the courts generally accept that the Van Vuuren Judgment is not applicable.

Hence, if you are no longer over-indebted as detailed in point (1) above, the debt counselling process can be cancelled and the debt review flag can be removed from your credit reports. Circumstances change and consumers may find debt review is not working for them or it is just not necessary anymore. This entails the rescission of the court order that enforces the debt review, or where a court order is not in place, the consumer can apply to be declared to be no longer over-indebted. The credit bureaux therefore adhere to the National Credit Regulator’s Withdrawal from Debt Review Guidelines which essentially only provide for the following options to withdraw from the debt review process:

(a) the consumer has withdrawn from the debt review process prior to the issuance of Form 17.2;
(b) the debt counsellor has suspended provision of service due to non-cooperation by the consumer but the debt counsellor remains the debt counsellor on record;
(c) the consumer has obtained a court order to rescind the debt review order;
(d) the consumer has obtained a court order declaring the consumer no longer over-indebted. We have assisted and continue to assist many with clearing the debt review flag from their credit reports.

3) How to Exit Debt Review and remove a debt review counselling notification

The most common reason to seek to exit debt review, is that the debt review has the effect of preventing you from exercising your right to apply for credit. Debt review essentially freezes your rights to contract on credit, even if it does prevent creditors from suing you whilst under debt review. The freeze endures until the conditions stipulated in section 88(1) or (2) of the National Credit Act 34 of 2005 occur. These are the primary debt review exit requirements and these sections read as follows:

“Section 88: Effect of debt review or re-arrangement order or agreement

(1) A consumer who has filed an application in terms of section 86 (1), or who has alleged in court that the consumer is over-indebted, must not incur any further charges under a credit facility or enter into any further credit agreement, other than a consolidation agreement, with any credit provider until one of the following events has occurred:

(a) The debt counsellor rejects the application and the prescribed time period
for direct filing in terms of section 86 (9) has expired without the consumer having so applied;

(b) the court has determined that the consumer is not over-indebted, or has
rejected a debt counsellor’s proposal or the consumer’s application; or

(c) a court having made an order or the consumer and credit providers
having made an agreement re-arranging the consumer’s obligations, all the consumer’s obligations under the credit agreements as re-arranged are fulfilled, unless the consumer fulfilled the obligations by way of a consolidation agreement.

(2) If a consumer fulfils obligations by way of a consolidation agreement as contemplated in subsection (1) (c), or this subsection, the effect of subsection (1) continues until the consumer fulfils all the obligations under the consolidation agreement, unless the consumer again fulfilled the obligations by way of a consolidation agreement.”

Hence, where no order of debt rearrangement has been made, you can exit debt review by presenting the initial debt restructuring proposal to the Magistrate, together with additional information on your improved financial circumstances. In terms of section 87(1) of the National Credit Act 34 of 2005, the Magistrate must then “conduct a hearing and having regard to the proposal and information before it and the consumer’s financial means prospects and obligations” and decide whether to reject the recommendation or otherwise. If the facts show that you are not over-indebted, the Magistrate must, logically, reject the proposal because, in terms of section 79 read with section 88(1)(b) of the National Credit Act 34 of 2005 you are not over-indebted.

Section 71 of the National Credit Act 34 of 2005 is also another provision that regulates how you can exit debt review. This section provides as follows:

“Removal of record of debt adjustment or judgment

(1) A consumer whose debts have been re-arranged in terms of Part D of this Chapter, must be issued with a clearance certificate by a debt counsellor within seven days after the consumer has-

(a) satisfied all the obligations under every credit agreement that was subject to that debt re-arrangement order or agreement, in accordance with that order or agreement; or
(b) demonstrated-

(i) financial ability to satisfy the future obligations in terms of the re-arrangement order or agreement under-

(aa) a mortgage agreement which secures a credit agreement for the purchase or improvement of immovable property; or
(bb) any other long term agreement as may be prescribed;

(ii) that there are no arrears on the re-arranged agreements contemplated in subparagraph (i); and

(iii) that all obligations under every credit agreement included in the re-arrangement order or agreement, other than those contemplated in subparagraph (i), have been settled in full.

(2) If a debt counsellor decides not to issue or fails to issue a clearance certificate as contemplated in subsection (1), the consumer may apply to the Tribunal to review that decision, and if the Tribunal is satisfied that the consumer is entitled to the certificate in terms of subsection (1), the Tribunal may order the debt counsellor to issue a clearance certificate to the consumer.

(3) (a) A debt counsellor must within seven days after the issuance of the clearance certificate, file a certified copy of that certificate, with the national register established in terms of section 69 of this Act and all registered credit bureaux.

(b) If the debt counsellor fails to file a certified copy of a clearance certificate as contemplated in subsection (1), a consumer may file a certified copy of such certificate with the National Credit Regulator and lodge a complaint against such debt counsellor with the National Credit Regulator.

(4) Upon receiving a copy of a clearance certificate, a credit bureau, or the national credit register, must expunge from its records-

(a) the fact that the consumer was subject to the relevant debt re-arrangement order or agreement;
(b) any information relating to any default by the consumer that may have-

(i) precipitated the debt re-arrangement; or
(ii) been considered in making the debt re-arrangement order or agreement; and

(c) any record that a particular credit agreement was subject to the relevant debt re-arrangement order or agreement.

(5) Upon receiving a copy of a court order rescinding any judgment, a credit bureau must expunge from its records all information relating to that judgment.

In summary, section 71 therefore requires that a debt counsellor, under the stipulated conditions, may issue a clearance certificate. If the debt counsellor fails to give a clearance certificate, you can lodge a complaint with the National Consumer Tribunal.
Given the above, it is evident that the process to remove a debt review notice listing from your credit reports essentially depends on the status of the accounts that were included in your debt review, that is, whether you still have outstanding accounts or whether you settled all the accounts other than a home loan.

3.1) Where the accounts under debt review have not been settled

If your debt review is subject to a court order, then you must make, an application to set aside or rescind the debt review order. If there is no court order and you still have outstanding accounts, you must make a court application to withdraw the debt review process. Once the debt review order is rescinded or the court has withdrawn the debt review process, you can resume direct payments to the creditors and you are free to negotiate directly for new payment arrangements. In some instances, accounts may not have been paid for a continuous period of 3 years and the creditor has not issued summons or taken judgment for this account. Such an account is deemed to have prescribed and does not have to be repaid. Should you have any prescribed accounts, then the court application shall detail this.

Creditors may refuse to negotiate directly until the debt review process is withdrawn or set aside by the court. Your court application must therefore show that you are financially able to pay the original contractual amounts on your accounts. The reason is that creditors have the right to demand these amounts once the debt review is terminated by the court. However, if you are already paying the creditors’ directly, then the creditors are likely to accept the same payment arrangements.

Once the court application to withdraw the debt review is granted, the court order and entire court application is submitted to the National Credit Regulator (NCR) for verification. If satisfied with the validity of the submitted documents, the NCR then updates your status to G1/G which results in the ensuing removal of the debt review flag from your credit reports that are held by the various credit bureau. Generally, the NCR verification process takes 7 – 20 business days to complete. Albeit that the ensuing credit bureau update ought to occur automatically after the NCR’s update, we still advise that you obtain your latest credit reports to verify same once we have provided you with the NCR’s written update confirmation.

3.2) Where all the debt review accounts (excluding a home loan) are paid up or written off due to prescription
Section 71 of the Act pertains to the issuance of a clearance certificate. For a clearance certificate to be issued, all the accounts that were included in the debt review (other than a home loan) must be settled. The issuance of the clearance certificate results in the removal of the debt review flag from the consumer’s credit report. Should a debt counsellor decide not to issue or fails to issue a clearance certificate, the consumer can apply to the National Consumer Tribunal to review the debt counsellor’s decision not to, or failure to, issue the clearance certificate. If the Tribunal is satisfied that the consumer is entitled to the clearance certificate, the Tribunal may order the debt counsellor to issue a clearance certificate to the consumer.
 
In Andrew Lloyd Govender v Sebastien Alarik Alexanderson NCT/193156/2021/141(1)(b), it was held that the Applicant’s request for a clearance certificate to be issued is unwarranted since section 71(3) of the NCA only allows the Tribunal to order the debt counsellor to issue a clearance certificate if the Tribunal is satisfied that the consumer is entitled to the certificate in terms of section (2)(b)(i). In terms of this section, the requirement would be that the consumer has satisfied all the obligations under all the credit agreements that were subject to the debt re-arrangement. In this case, the Applicant still has three accounts which need to be settled.
 
Further, the debt counsellor is obliged to file a certified copy of the clearance certificate with the national register of credit agreements and all registered credit bureaux within seven days after issuance of the clearance certificate. Where a debt counsellor fails to file a certified copy of a clearance certificate, the consumer may file a certified copy of the clearance certificate with the National Credit Regulator and the consumer may also lodge a complaint against the debt counsellor with the National Credit Regulator. It is important to note that prior to the National Credit Amendment Act, the debt counsellor was not obliged to submit the clearance certificate to the national register and to the credit bureaux.
 
In practice, a person who qualifies for a clearance certificate would obtain the clearance certificate from the debt counsellor and present it to the credit bureaux. Upon receipt of a copy of a clearance certificate, a credit bureau, or the national credit register, must expunge from its records:
(a) the fact that the consumer was subject to the relevant debt re-arrangement order or agreement;
(b) any information relating to any default by the consumer that may have –
(i) precipitated the debt re-arrangement; or
(ii) been considered in making the debt re-arrangement order or agreement; and
(c) any record that a particular credit agreement was subject to the relevant debt re-arrangement order or agreement.
4) How long does the debt review court cancellation process take?

The process normally takes 3 – 6 months to complete. The process is this long as a court application must be drafted and necessary time period formalities observed to ensure that the court application is properly placed before the court. For example, the court application to withdraw the debt review must be served on all the creditors at least 20 business days before the court date and proof of this service notification must also be filed at court. Hence, the process seldom ever takes less than 3 months to complete. Further, in some instances, questions or concerns can be raised by the court, or debt counsellor, or even delays with obtaining the debt counselling documentation can result in the process taking longer. Our assistance with this process does include attending to any court postponement that may arise at no additional cost to ensure that a final decision is obtained from the court.

5) Common misperceptions about cancelling debt review

The following are explanations to some of the most common misunderstandings about the debt review cancellation process.

All accounts must be paid in full

Once your financial circumstances have improved and you can pay the original monthly instalments due to creditors, then you can make a court application to terminate debt review. If you are no longer over-indebted it would be unjust and in breach of the spirit of the National Credit Act o have you listed under debt review. The National Credit Act 34 of 2005 essentially protects the consumer, and where relevant aids in the fiscal rehabilitation of the consumer.

I can cancel Debt Review myself or my debt counsellor can do it

In the case of Rougier v Nedbank, 27333/2010 (South Gauteng High Court),

the court held that a debt counsellor does not have the statutory powers to terminate or withdraw debt review. The NCR’s Withdrawal from Debt Review Guidelines were published on 25 February 2016 to take into account this ruling. Before, the debt counsellor would simply issue a Form 17.4 to cancel the debt review process, but Form17.4 has now been replaced by the Form 17.W. This form only caters for termination of debt review under the following circumstances:

A. The consumer has withdrawn from the debt review process prior to issuance of Form 17.2 and the credit bureaus have been updated accordingly via the NCR Debt Help System.
B. The debt counsellor has suspended provision of service due to non-cooperation by the consumer. The debt counsellor remains the debt counsellor on record.
C. The consumer has obtained a court order to rescind the debt review order. Credit bureaus have been updated via the NCR Debt Help System.
D. The consumer has obtained a court order declaring the consumer no longer over-indebted. Credit bureaus have been updated via the NCR Debt Help System.

Only point A, C or D result in the termination of the debt review process and the removal of the debt review signifier from the consumer’s credit reports. Thus, once the Form 17.2 has been issued and it is detailed that your debt review application has been accepted, this shall be noted on your credit report. Unless you pay up all accounts and become entitled to a clearance certificate, the only way to terminate the debt review process, according to the NCR’s Withdrawal from Debt Review Guidelines, is to apply to court for either the rescission of the debt review order if one was obtained, or for a determination that the consumer is no longer over-indebted.

No court order was issued therefore I do not need to apply to court to cancel

As detailed in the National Credit Regulator’s Removal from Debt Review Guidelines, the termination of the debt review process is only possible if you apply to court to rescind the debt review order if one was obtained, or for a determination that you are no longer over-indebted. These are the only two circumstances in which a Form 17.W can be issued that results in the removal of the debt review signifier from a credit report. If you have paid up all the accounts that are under debt review then neither of the two circumstances shall apply, as you are then entitled to a clearance certificate that your debt counsellor must issue. You may also obtain a clearance certificate if you only have a bond account outstanding and it is up to date. If you have any other account outstanding, you must show by court application, that you can afford to pay the account and that you are not over-indebted.

I can cancel debt review without an attorney

It is permissible for you to represent yourself at court. However, the formalities of making an application are best understood by an attorney and mistakes in the application can result in the dismissal of the application or postponements that can readily be avoided. As such, you are advised to employ the services of an attorney to attend to the court application to terminate the debt review process and to ensure that once the court application is granted, your credit information is updated accordingly with the credit bureaux and National Credit Regulator to reflect that you are no longer under debt review.

I must attend court to terminate debt review

You do not have to be present at court. You must facilitate the process where required, typically by providing required information and documentation.

Termination can be done in less than 2 months

Realistically, the debt review cancellation process can never take less than 2 months. Firstly, the court application must be prepared and a court date must be obtained. The court date is never likely to be less than 2 weeks away, as the court application must be served on the debt counsellor and the creditors. Furthermore, the allocation of a court date depends on the case load that the court has before it already. Thereafter, once the court order is obtained, the debt review signifier must be removed from the consumer’s credit reports and from the NCR’s database. This takes a minimum of 20 business days as per the National Credit Act 34 of 2005.

I can cancel debt review and continue to pay the reduced instalment

The application to terminate debt review depends on your ability to show you are no longer over-indebted. If you cannot afford to increase the debt review repayment amounts, preferably to the amounts that they were paying before commencing with the debt review process, it is highly unlikely that the application shall succeed unless the creditors have indicated acceptance of such reduced payments. click here if you cannot afford debt review

Once Debt Review is terminated, creditors cannot take legal action to recover debts

Section 88 (3), provides that a creditor may not take legal action to enforce a credit agreement if you have already applied for debt review and the application has been accepted and you have been declared over-indebted. This provision only applies while you are under debt review. As soon as your debt review is terminated, creditors have the right to take legal action to enforce a credit agreement that was previously subject to debt review, typically calling upon you to settle any arrears that may have accumulated on the account and reverting to the original initial contractual repayment amount.

6) FREQUENTLY ASKED QUESTION ABOUT CANCELLATION OF DEBT REVIEW:

The following are frequently asked questions about the cancellation of debt review:

Q: Do I need to inform my debt counsellor about my cancellation?
A: A debt counsellor does not have the legal authority to remove you from the debt review process. A debt counsellor can only cancel his/her services. To make a court application to cancel debt review, you need an attorney and as a law firm, we can assist.

Q: Are you going to do everything on my behalf (or will I need to go to court)?
A: You shall not have to attend a court hearing when the application is presented to court. Attorneys familiar with these types of applications represent your case on your behalf and argue against any opposition that may have arisen and address any concerns that the court can raise.

Q: What happens if the debt review flag has been removed and I still can’t get credit?
A: You will be able to apply for credit once the debt review flag is removed. However, we would also get your latest credit reports, once the debt review flag is removed, to check whether there are any other negative listings therein that may affect your creditworthiness.

Q: Because you say it is not necessary to settle my accounts we can start with the process. I was waiting for my debt counsellor to send me my updated balances from my creditors, which I think you will do while in the process correct me if I am wrong?
A: That is correct. It is not essential that all the accounts are settled. In fact, if all the accounts were settled, the application to court to cancel the debt review process would not be necessary as you would be entitled to a clearance certificate that your debt counsellor would issue at no cost or charge. However, as you have not settled all the accounts you are not entitled to a clearance certificate and hence the application to court to cancel your debt review is necessary. Further, this application can be brought as your financial circumstances have improved since applying for debt review.

Q: How will I know how much I need to pay my creditors after cancellation and my creditors won’t summon or add more charges if they see that I am not under debt review anymore. How does the cancellation work when it comes to creditors?
A: Many creditors will not conclude direct payment arrangements with the consumer whilst the consumer is under debt review. The rationale behind the creditors reasoning is that they cannot negotiate with the consumer as the debt review restructuring proposals are binding. Hence, the exact amounts your creditors shall expect will generally only be known after you exit the debt review process, albeit that some creditors can give an indication of the expected payments beforehand. When considering to cancel the debt review process you must therefore be comfortable that your financial circumstances are such that you can afford to revert to your initial contractual repayment obligations (the amounts you were paying before going under debt review). Once the court cancels the debt review process, we can assist with negotiating repayment arrangements should this be required.

Q: I was of the view that the Debt review exit has been finalised as per the Notice of Withdrawal document that the debt counsellor has given me but I still have the debt review flag on my credit reports. Does it mean that the Debt review is still in force although its withdrawn from Court?
A: The Notice of Withdrawal only confirms that the debt counsellor has withdrawn the debt review court application that it filed in court. A debt counsellor can only issue a clearance certificate if all the accounts (other than a home loan) are settled. A debt counsellor cannot withdraw the debt review process – the debt review process can only be withdrawn by a court where a consumer has outstanding accounts. If you still have outstanding accounts, a court application would have to be filed that confirms that you are not over-indebted for the debt review process to be withdrawn and removed from your records.

Q: What does the “C” status specifically mean in terms of my current financial standing?
A: Status “C” refers to your record status as held by the National Credit Regulator (NCR). The NCR has a system in which persons under debt review are categorised according to prescribed debt review statuses and each status signifies the stage at which the debt review process is at for a particular consumer. According to the NCR, status “C” means that there has been an “Assessment has resulted in a decision that the consumer is over-indebted”. Had there been a court order for the debt review, the status would be “D4”. FYI, where the consumer is “D4” the court process to withdraw the debt review is more difficult as some magistrates do not rescind debt review orders.

Q: How likely is it that the court will approve my application?
A: The court is likely to grant the application if the consumer can demonstrate that the original monthly contractual amounts can be paid if the accounts are still enforceable. However, the outcome of any court application ethically cannot be guaranteed.

Q: What happens if the court denies the application? Am I still required to pay the full legal fee?
A: The full legal fee is payable irrespective of the outcome as the set legal fee that is charged is for the drafting of the court application and all necessary court attendances – it is not based on a contingency. Our attorneys do however have a high success rate with these types of applications and reviews of their services can be seen at https://www.hellopeter.com/campbell-attorneys.

Q: How will the law firm prove that I am no longer over-indebted? Will I need to submit financial statements or proof of income?
A: Confirmation of what your monthly income is as well as being able to demonstrate in an affidavit that you can afford to pay any account that may still outstanding as per the original contractual terms.

Q: Can I cancel the process if I change my mind after the application has started?
A: Yes, you may cancel at any stage and depending on the work done as at date of cancellation, the set fee would be reduced i.e. if the process is cancelled after a court date is secured, then the full fee would be payable whereas if cancellation is received during the drafting process, the set fee would be reduced by 50%.

Q: What does the timeline look like for receiving updates, and how often will I be informed of progress?
A: The entire process usually takes 3 – 6 months to complete depending on availability of court dates. Key updates are provided in which you are informed at the start of the required documents and information and where this is not available, we obtain same from third parties. The court application is then drafted and during the drafting process, you would typically receive 2 – 3 updates via email in which the draft affidavit is sent to you to peruse and provide any outstanding information. Once it is finalised, we then obtain a court date and you are advised of the court date – typically the allocated court date is 2 -3 months ahead from the application date. An update would then be sent once the court outcome is received on the allocated court date. Once granted, we submit the court order and supporting documents to the NCR for your status to be updated to G1/G. We then provide a final update that contains the NCR’s written confirmation that the status update has occurred.

Q: Is there any flexibility with the payment plan if I encounter difficulties during the process?
A: You may cancel at any stage and depending on the work done as at date of cancellation, the set fee would be reduced i.e. if the process is cancelled after a court date is secured, then the full fee would be payable whereas if cancellation is received during the drafting process, the set fee would be reduced by 50%\

Q: Are there any other potential costs I should be aware of beyond the legal fees?
A: A set fee is charged for the process – there are no other additional costs charged in respect of the process.

Q: If the court outcome is not in my favor, how will this affect my credit report or future options?
A: The court outcome cannot negatively affect your credit report or future options.

Q: Why is it important to obtain a court order to cancel my debt review?
A: A court order is an order granted by a magistrate judge to legally enforce credit providers to note that a court has withdrawn the debt review process and that you are no longer over indebted.

Q: How does the Debt Review Cancellation Legal process work?
A: A court application is made to court to withdraw the debt review process if you are no longer over- indebted. Generally, you must be able to revert to paying the original contractual monthly amounts that you were paying before the debt review process and creditors can demand that you do so if your debt is still valid and enforceable.

Q: I thought I can cancel my debt review process simply upon my request. Why is this matter going to court?
A: The National Credit Regulator’s Withdrawal from Debt Review Guidelines of the 25 February 2015 require that a court application be made to withdraw the debt review process where the consumer still has outstanding accounts and does not qualify for a clearance certificate. (a clearance certificate is issued where all debt review accounts are paid up or where only a home loan is outstanding).

Q: How long does it take to obtain a court order?
A: It usually takes 5 – 6 months to obtain a court order. In some instances, the court process can take over a year if protracted postponements arise. s some courts are reluctant and hesitant to grant applications to withdraw the debt review process. Where this occurs, our expertise lies in succinctly addressing any concerns raised by the court.

Q: Must I continue to pay the creditors whilst the court application to withdraw the debt review has not been finalised?
A: You should not stop paying your monthly payments to your creditors during the court process if you are still paying the creditors’ as per the debt review process. Similarly, if you are already paying the creditors’ directly, then continue to do so. In some instances, you may not be paying the creditors directly or via the debt review process and creditors may not have been paid for several years. In this instance, the circumstances regarding the non-payment of the creditors and whether such creditors’ claims are still valid and enforceable shall be considered and a case shall be made out in the court application to fully advise the court of your circumstances.

Q: What is the Legal fee?
A: A set legal fee is charged which means that you are not charged for any ad hoc disbursements or postponements that can arise in respect of the court application and neither are you charged an hourly tariff. The set legal fee includes drafting the court application and attending to any postponements that often arise with these types of applications in order to obtain a final outcome.

Q: What is a court order?
A: A court order is an order granted by a magistrate judge to legally enforce credit providers to note that a court has withdrawn the debt review process and that you are no longer over indebted.

Q: I want to remove my name under debt review but have not finished paying my debt. Is it possible?
A: Yes, this can be done if your debt review was made an order of court and the court order is subsequently rescinded or an application is made to court to have you declared not over-indebted.

Q: Please advice on how exiting the debt review prematurely will affect my credit record & do you think I can qualify to get credit finance immediately after exiting debt review?
A: Once the debt review process is terminated the debt review status will be removed from your credit report thereby improving your creditworthiness. We also advise that you get your latest credit reports and check whether any of your credit reports contain negative information other than the debt review status as any other negative information can affect your credit application even once the debt review status has been removed from your credit report. After all, whether you will be able to obtain finance after the removal of the debt review status depends upon the general state of your credit report.

Q: My debt review was a consent order that was confirmed by the National Consumer Tribunal. Can this be set aside?
A: Besides the powers given in the National Credit Act 34 of 2005 to the Magistrate’s Court to grant a court order confirming the reduced payment arrangements with the consumer, the said Act also gives the National Consumer Tribunal the power to grant a consent order confirming the resolution or reduced payment arrangements. Where a consent order has been granted, it is important to note that in terms of section 165 of the National Credit Act, an order granted by the National Consumer Tribunal can only be rescinded or varied in any one of the following instances:

• Where the order was erroneously sought or granted in the absence of a party affected by it;
• Where the order contains an ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission;
• Where the order was made or granted as a result of a mistake common to the parties to the proceedings.

Examples of grounds that can be relied upon to rescind a consent order include instances where the consumer withdrew or attempted to withdraw the debt review prior to the consent order being granted or the consumer did not duly give permission and authority for the consent order to be obtained.

Tagged
error: Content is protected !!