Is it possible to remove the debt review status from your credit profile?
As of March 2022, a consumer can no longer voluntarily withdraw from the debt review process—even prior to being declared over-indebted. What this means is that: as soon as you apply for debt review (debt counselling), you're locked into the process. This is why this decision should not be taken lightly.
The good new is, you can be removed from the process, but there are only two legal ways of being removed. Continue reading this blog post to find out.
*Free debt review removal does not exist. There will always be debt counselling fees or fees for the lawyers involved. Consumers should be wary of false claims of free removal from the debt counselling process.
Debt review, also known as debt counseling or a type of debt consolidation, is a financial process designed to help individuals and families who are struggling with overwhelming debt. It is a formal and structured approach to managing and reducing debt by working with a qualified debt counselor or debt review company.
Read: What is debt review in South Africa?
Is it possible to leave the debt review process early?
If you bit the bullet and signed up for the debt review process and you're now feeling the pinch of not having access to any more credit, you might be thinking: "Is it possible for me to quit the review process early?"
The short answer is: no, you can't exit the review process early.
You can, however, appeal the review application, but the court has to find that the consumer is not over-indebted. This is usually because of a drastic change in circumstances, such as receiving a job promotion for example.
While the thought of being 'locked into the process' might seem frightening if you have been declared over-indebted, can you consider that this might be the best route for you to take?
Perhaps, instead of asking if you can leave debt review early, you consider the following:
- If you weren't under debt review, you could have lost your assets, like your home and your car, because they would no longer be protected legally.
- Remember, when you signed up for the debt counselling process, your assets became legally protected. Even if you could leave the review process early, it would leave you exposed, and creditors would be able to take legal action against you.
- The Review process is intended to help you become debt-free.
- This is in part achieved because once an order of the court has been issued, the credit bureaus are alerted, and you are no longer allowed to take out any further credit. While this may initially seem frustrating, remind yourself that taking out credit, when you are already struggling to make your debt repayments, is just going to place further strain on your financial situation.
Two legal ways to remove debt review status:
If you're currently undergoing debt review, according to the National Credit Regulator (NCR), there are only two ways you can legally clear your name from the debt counselling process:
- If all your debts have been paid up as outlined in the debt review court order or review payment arrangement plan.
OR - If all your short-term credit agreements that have been stated in the court order or for debt review payment arrangement plan, have been paid up completely. The only debt you still have is your home loan.
- According to the National Credit Act, short-term credit agreements include credit cards and vehicle financing.
If you feel that you satisfy either of the above-mentioned conditions, your Debt Counsellor should issue you with a Clearance Certificate. If you are unable to get hold of your Debt Counsellor or they are no longer in practice, you can chat with us to help.
If your debt has been paid up we can manage the administration of your Clearance Certificate on your behalf.
We'd be happy to help.
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