INFORMATION GUIDE:

How to and what to know about cancelling the debt review process

Who we are and why we guarantee our assistance.

Campbell Attorneys successfully assists consumers nationwide to cancel the debt review process albeit that the resultant goal of such assistance, namely to cancel the consumer’s debt review process and remove its notation from the consumer’s credit report, can be challenging. Challenging in some instances as questions, concerns and queries can be raised during the cancellation process, either by the courts, debt counsellor and/or credit bureaux. Our expertise in consumer and credit law enables us to continuously overcome any such obstacles, whether it be by addressing the court on points of law that can be raised or on the consumer’s current financial circumstances versus the consumer’s financial circumstances at the time the consumer applied to go under debt review. Nevertheless, we offer the guarantee that if we cannot effectively assist you, we shall refund your fee.

Campbell Attorneys are registered practicing Attorneys and are therefore regulated by the Law Society of South Africa and are bound by the Attorneys’ Code of Conduct. Any complaints against an Attorney can be lodged with the Law Society of South Africa at no cost. Members of the public can locate and verify our credentials by contacting the Law Society of the Northern Provinces (LSNP) on 012 338-5800 and ask for the records department for verification assistance.

FREQUENTLY ASKED QUESTIONS 

1. Why does my credit report reflect that I am under debt review?

A consumer who has previously been found to be over-indebted by a debt counsellor shall have listed on his or her credit report this fact by way of a debt review flag or signifier thereof. Once the debt review flag or signifier is listed on the consumer’s credit report, the consumer shall not be able to obtain credit albeit that the consumer’s current creditworthiness may subsequently improve.

2. What does the debt review cancellation process entail?

The process entails the drafting of a court application in which the consumer seeks to have the court declare that he or she is not over-indebted and no longer in debt review. The court application also seeks to compel the credit bureaux to facilitate the removal of the debt review flag from the consumer’s credit reports and to compel the debt counsellor to provide the consumer with the applicable Form 17.W that confirms that the consumer has now been found by a court of law to be not over-indebted and no longer in debt review.

3. Is a court application to cancel the debt review process necessary?

Yes, a court application to cancel your debt review process shall be necessary in the following instances: 

3.1 Where the accounts under debt review have not been settled If, since applying to go under debt review, your financial circumstances have improved, and you are no longer over-indebted but still have outstanding accounts, then a court application to cancel the debt review process is necessary.

3.2 Where the accounts under debt review have been settled in full If you have paid up all the accounts that were included in the debt review process, then a court application is not necessary. In this instance, you would be entitled to a clearance certificate that is issued at no cost or charge by the debt counsellor.

3.3 Where all accounts have been paid up but there is a home loan account or large credit agreement that is outstanding If you have paid up all the debt review accounts and you are only left with an outstanding home loan credit agreement, then it is not necessary to apply to court to cancel the debt review process. In this instance, the debt counsellor is also obliged to provide you with a clearance certificate.

4. What is a clearance certificate and am I entitled to one?

As per paragraph 3.2 and paragraph 3.3 above, a clearance certificate is only issued in certain instances, i.e. where all the debt review accounts are paid up or where there is only a home loan credit agreement that is still outstanding. If you do not qualify for a clearance certificate, you shall have to apply to court to be declared not over-indebted and in debt review.

5. Must all my accounts be paid in full or must I have paid up any accounts before I can consider cancelling the debt review process?

If a consumer’s financial circumstances have improved and he or she is now able to meet the repayments ordinarily due to creditors, then the consumer’s debt review process can be terminated.

6. Can the debt counsellor cancel my debt review status?

No. In the case of Rougier v Nedbank, 27333/2010 (South Gauteng High Court), the court held that any act by a debt counsellor to terminate or withdraw a consumer from the debt review process is beyond the statutory powers of a debt counsellor as espoused in the National Credit Act, and therefore the conduct is prohibited. This decision led to the issuance of the NCR’s Withdrawal from Debt Review Guidelines on 25 February 2016. Prior to the issuance of the NCR’s Withdrawal from Debt Review Guidelines, consumers could request the issuance of a Form 17.4 from their debt counsellor, or the debt counsellor would issue the Form 17.4 of their own accord. The issuance of the Form 17.4 did result in the voluntary cancellation of the debt review process by the consumer or the debt counsellor. The Form 17.4 has now been replaced with 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 bureaux 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 bureaux 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 bureaux have been updated via the NCR Debt Help System.

Only points A, C and D would 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 a consumer’s debt review application has been accepted, this shall be noted on the consumer’s credit report.

7. My debt review is not subject to a court order. Is it still necessary to apply to court to cancel the debt review process?

As a debt counsellor can no longer withdraw a consumer form the debt review process if the consumer still has outstanding accounts, the court application is necessary albeit that the consumer’s debt review was not previously made an order of court.

8. Can I cancel the debt review process without an attorney’s assistance?

It is permissible for a consumer to represent him or herself 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 if an attorney’s assistance is engaged. It is therefore advisable that a consumer enlists an attorney’s assistance to attend to court application to terminate the debt review process to ensure that court application is readily granted. Further, an experienced attorney shall be readily able to address any concerns that can be raised by the court with such applications.

9. How long does the debt review court cancellation process take?

Bearing in mind the prescribed court periods that must be adhered to with the filing of any court application, the process can take anywhere from 2 – 3 months to complete. The process is rather lengthy for the court application must be prepared and a court date must be obtained. Thereafter, the creditors must be served with the court application, in short, this means that a copy of the court application is given to the creditors and a period of at least 14 days must lapse from when the application is served. On the allocated court date, the application is typically granted in the first instance but should a postponement arise, then this must be catered for, thereby extending the period to complete the court application phase. Thereafter, once the court order is granted, it is submitted to the debt counsellor with the request that the Form 17.W is issued and the credit bureaux are then accordingly updated. The credit bureaux then have a maximum period of 20 business days within which to process removal of the debt review flag as per the National Credit Act 34 of 2005.

10. Can I cancel the debt review process and continue to pay the reduced instalment amounts that I was or am still paying under debt review?

The application to terminate debt review depends on the consumer’s ability to show that he or she is not over-indebted. If the consumer 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.

11. Once the debt review process is terminated, can my creditors take legal action to recover their debts?

Yes. Section 88 (3), provides that a creditor may not take legal action to enforce a credit agreement if the consumer has already applied for debt review and the application has been accepted and the consumer has been declared over-indebted. This provision only applies while the consumer is under debt review. As soon as the consumer’s 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 the consumer to settle any arrears that may have accumulated on the account and requiring the consumer to revert to the original initial contractual repayment amount.

12. I want to remove my name under debt review but have not finished paying my debt. Is it possible?

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.”

13. 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?

Request a clearance certificate from your debt counsellor and submit it to the credit bureaux. The credit bureaux shall then remove the debt review status from your credit reports. In terms of the new National Credit Amendment Act 14 of 2014 which became effective on the 13th of March 2015, the clearance certificate can also be provided where there is an outstanding mortgage agreement or any other large credit agreement which reflect no arrears and are up to date and all the small credit agreements have been paid up.

14. Shall cancelling the debt review process prematurely affect my credit record & am I likely to be able to obtain credit immediately thereafter?

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. Other negative information can affect your credit application even once the debt review status has been removed from your credit reports. 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. Click here to check your Credit Reports.

15. My debt review is subject to a consent order that was confirmed by the National Consumer Tribunal. Can this be set aside?

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. If your debt review is subject to a consent order, then as per section 165 of the National Credit Act, this consent order can only be rescinded or varied in any one of the following instances:

A. Where the order was erroneously sought or granted in the absence of a party affected by it;

B. Where the order contains an ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission;

C. Where the order was made or granted as a result of a mistake common to the parties to the proceedings.

If you have neither of the above grounds, then the consent order cannot be rescinded in which case, you would have to apply to court be declared not over-indebted and no longer in debt review.

16. What does the court cancellation procedure entail?

If your debt review is subject to a court order, we apply to court to rescind it. In some courts, we find a hesitance and even a refusal to rescind debt review court orders, in which case we would have to apply to the high court to have you declared not over-indebted and no longer in debt review. If your debt review has not been made an order of court, we then apply to court to have you declared not over-indebted. Both applications have the effect of effectively cancelling the debt review process. Once the court application is granted, we then ensure that the debt review flag is removed from your credit reports as held by the various credit bureaux.

17. When is the payment of the legal fee expected and what is the method of payment should I decide to instruct Campbell Attorneys?

We charge set all-inclusive fees which means that even if an application is postponed or queries are raised by the Court, we attend to the drafting of supplementary documentation as part of our fee. Fees can be paid off monthly over a maximum period of 12 months or by way of 50% upon instruction and the balance upon completion. Click here to request Debt Review Cancellation Quotation

18. How do I pay for something that I do not have any binding legal agreement?

As we provide a service, we issue an invoice to our clients and such invoice stipulates the nature of the instruction and fee.

Shall I get continuous updates on the cancellation process and who shall be assigned to my case should I decide to proceed?

We provide updates to clients throughout the process. An Attorney and Legal Assistant are assigned to each client and the details thereof shall be provided upon confirmation of instruction.

19. How do I know that Campbell Attorneys shall be committed to my instruction?

Campbell Attorneys are registered practising Attorneys and are therefore regulated by the Law Society of South Africa. In the unlikely event that we cannot effectively assist with the cancellation of the debt review process, we shall refund your fees