Debt Review Removal
On 03 September 2019, the Johannesburg High Court delivered a “full bench decision” (that is, a decision given by three Judges) which clarifies the debt review exit process and the right to exit debt review.
To terminate the debt review process and to have the debt review notice removed from your credit reports requires that a court application be made for the court to find that you are not over-indebted, even if there is no court order in place for your debt review.
Should you wish to terminate the debt review process, please complete the questionnaire below, to allow us to do an assessment of your probable cause. We shall then advise further.
The National Credit Act (“the Act”) introduced debt review as a debt relief measure for over-indebted consumers. This is a statutory process that is only conducted by registered debt counsellors.
The process to withdraw or terminate debt review by the consumer or debt counsellor is not specified in the Act; however, the credit industry has in the past years developed a voluntary withdrawal process and a Form 17.4 to facilitate the withdrawal process either by a consumer or DC.
COMMON MISPERCEPTIONS ABOUT CANCELLING DEBT REVIEW
The following are the most common misperceptions about canceling or removing the debt review flag or debt review status.
All accounts must be paid in full.
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.
To have the consumer listed as being under debt review and hence over-indebted would be unjust and in breach of the spirit of the National Credit Act, as he or she is factually not over-indebted anymore as he or she is able to pay his or her creditors directly without the need for debt review. (see reportable judgment of Thizwilondi Ananuas Magadze and Adcap and Others; Soyaphi Green Ndlovu and Bernice Koekemoer and Others  ZAGPPHC 1115.
In the aforesaid judgment, Judge AJ Neukircher delivered a combined judgment as the applications sought were virtually mirror images of each other, other than specifics pertaining to each applicant. The applicants, not being entitled to a clearance certificate, as per section 71, sought to terminate the debt review process and be declared no longer over-indebted.
The question as to whether a court order, declaring the applicants no longer over-indebted has the same effect as a clearance certificate, as detailed above, was considered.
The learned judge pointed out that section 88(1) does not have a similar proviso to section 71(5) which is the expunging of the credit bureau records.
However, it was held that to “grant an order that falls short of failing to expunge the consumer’s credit record in toto would effectively mean that section 71 would carry more weight than an order issued out by the High Court and that situation would be untenable”.
The NCA is “geared towards the protection of the consumer, and where relevant, the fiscal rehabilitation of the consumer”. (see Nicky Campbell’s further discussion in Chapter 6 – Consumer’s Rights & Credit Provider’s Obligations, in “A Guide to the National Credit Act”, [Lexis Nexis], 2008, by JW Scholtz (Author) , Jannie Otto (Author) , E Van Zyl (Author) , Corlia Van Heerden (Author) , Nicky Campbell (Author)
Debt Review must and can be canceled by the consumer or by the Debt Counsellor.
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 debt review is beyond the statutory powers of a debt counsellor as espoused in the 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 this date, 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.
As a result of the Rougier v Nedbank decision, the Form 17.4 has been replaced by the Form 17.W. This form only caters for termination of debt review under the following circumstances:
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.
- The debt counsellor has suspended the provision of service due to non-cooperation by the consumer.
- The debt counsellor remains the debt counsellor on record.
- The consumer has obtained a court order to rescind the debt review order.
- Credit bureaus have been updated via the NCR Debt Help System.
- 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 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.
Unless all the accounts are paid up or the consumer becomes 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 a 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 per point 2 above, and as further detailed in the National Credit Regulator’s Removal from Debt Review Guidelines, the termination of the debt review process is only possible if the consumer applies to the court to rescind the debt review order if one was obtained, or for a determination that the consumer is 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 the consumer’s credit report.
If the consumer has paid up all the accounts that are under debt review then neither of the two circumstances shall be applicable as the consumer would be entitled to a clearance certificate that would be issued by the debt counsellor once all debt included in the debt review process is paid up, or all such debt is paid up and there is only an outstanding home loan account that is up to date and the consumer is able to revert to the original monthly bond repayment amount.
I can cancel Debt Review without an attorney.
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 occurring.
As such, a consumer can 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, the consumer’s credit information is accordingly updated with the credit bureaus and National Credit Regulator to reflect that the consumer is no longer under debt review.
The consumer must attend court to terminate Debt Review.
The consumer does not have to be present at court.
The consumer must facilitate the process where required, typically by providing required information and documentation.
Debt Review Termination can be done in less than two 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 caseload 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 installment to my creditors.
The application to terminate a debt review depends on the consumer’s ability to show he or she is no longer 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.
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 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 reverting to the original initial contractual repayment amount.
Debt Review Withdrawal Guidelines 2021
The National Credit Act 34 of 2005 (NCA) introduced debt review as a debt relief measure for
over-indebted consumers. However, the provisions to withdraw from this process by the consumer or
debt counsellor (DC) is not specied in the NCA.
To provide a solution for consumers whose financial circumstances have improved whilst under debt
review to revert to contractual payments, in 2011 the credit industry implemented a voluntary Form 17.4
withdrawal process which was subsequently replaced on 19 February 2015 by the Withdrawal Guidelines
002 of 2015 issued by the National Credit Regulator (NCR). Since implementation of the NCR withdrawal
guidelines in 2015, legal clarity has been obtained through the High Court, which necessitated a review of
the NCR Withdrawal Guidelines 002 of 2015.
Final legal clarity was obtained in the full bench High Court matter: Van Vuuren v Roets and Others
(37407/2018)  ZAGPJHC 286;  4 All SA 583 (GJ); 2019 (6) SA 506 (GJ) (3 September 2019) (“Van
Vuuren Judgment”) which judgment provided clarity on whether a consumer under debt review whose financial circumstance has improved can withdraw from debt review in absence of a clearance certificate.
Following an intensive review process of the Van Vuuren judgment and its impact on the Withdrawal
Guidelines 002 of 2015 by the Credit Industry Forum(CIF), the NCR is pleased to announce that the paper
developed by the CIF has been signed and is issued as guidelines to be applied by all industry
participants. These guidelines will replace all previous Withdrawal Guidelines from the date of issue and
publication. Please take note that the NCA, its regulations, or case law will take precedence over provisions
made in these guidelines and will where necessary be amended.
All credit providers, credit bureaus, and debt counsellors are requested to comply with the current legal
framework and prevailing case law within which these guidelines are established from. Non-compliance
with these guidelines should be reported to the NCR.
Most frequent questions about Debt Review Removal.
In this section, The National Debt Review Center provides answers to questions that we frequently receive from potential and existing clients with regards to getting their names removed from debt review or debt counselling, as well as any other debt-related topics. For further information, please contact us at firstname.lastname@example.org or phone 0878221249.
My debt review was 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.
- 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:
2. 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;
3. Where the order was made or granted as a result of a mistake common to the parties to the proceedings.
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 to the court to have you declared “not over-indebted.”
Request a clearance certificate from your debt counsellor and submit it to the credit bureau. The credit bureau will then remove the debt review status from your credit report.
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.
Please advise 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?
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.