DEBT REVIEW CANCELLATION 

The Johannesburg High Court issued a judgement on September 3, 2019, clarifying the debt review cancellation process and the right to cancel debt review.

To cancel the debt review and have the status removed from your credit reports, you must file a court application, asking the court to rule that you are not over-indebted, even if there is no court order in place.

The National Credit Act introduced debt review as a debt relief measure for over-indebted consumers. A debt counsellor can carry out this statutory procedure. 

The process for cancellation of debt review by the consumer or debt counsellor is not specified in the Act, but the credit industry has developed a voluntary withdrawal process that can be facilitated by a debt counsellor in conjunction with an attorney.

There are common misconceptions about the cancellation of the debt review.

You must pay all bills in full.
If a consumer's financial situation has improved and he or she is now able to meet the repayments due to creditors.

To list the consumer as being under debt review and therefore over-indebted would be unjust and contrary to the spirit of the National Credit Act because they’re no longer over-indebted because they can pay their creditors directly without the need for debt review.

Can I cancel a debt review without assistance from an attorney or debt counsellor?
It is legal for a consumer to represent himself in court. However, an attorney is the best person to understand the formalities of making an application, and mistakes in the application can easily result in its dismissal or postponement.

In order to terminate the debt review process and ensure that the credit bureaus and the National Credit Regulator update the consumer's credit information to reflect that the consumer is no longer under debt review, a consumer can appoint an attorney to represent him in court.

Does the consumer have to appear in court to have the debt review terminated?
There is no requirement for the consumer to appear in court. Where necessary, the consumer must assist in the process by providing the required information and documentation.

How long will it take to cancel the debt review?
The Debt Review Cancellation Process requires the preparation of a court application and the setting of a court date.

Because the court application must be served on the debt counsellor and creditors, it will all depend on when this happens, and the allocation of a court date is determined by the court's current case load.

Debt Review Cancellation Order Granted - What's the next step?

Once a court order to remove the debt review has been granted, it must be removed from both the consumer's credit report and the NCR's database. 

Although the NCR may alter the status, it doesn't always reflect on the consumer's credit profile. As a result, the service provider should offer a quotation that includes lodging a dispute with the credit bureaus to rectify the consumer's credit history.

Is it possible to stop the debt review process while still continuing to make the reduced monthly payments?

The application to Cancel Debt Review depends on the consumer's ability to prove that he's no longer overindebted. 

Unless the creditors agree to lower installments in writing and attach the correspondence to the court application, the application is unlikely to succeed if the consumer is unable to increase the debt review payment amounts, preferably to the values they were paying before they started the debt review process.

After the cancellation of the debt review, can creditors take legal action to recover outstanding debts?

Yes, creditors can seek legal recourse to enforce a credit arrangement that was originally under debt review as soon as the debt counselling is cancelled.

Contact CURE DEBT to assist you with the CANCELLATION OF YOUR DEBT REVIEW and to CLEAR YOUR CREDIT RECORDS. 

CURE DEBT Your DEBT SPECIALIST.