Ongoing?
TITLE: Can Creditors Sue You During the Debt Review Removal Process? | NDRC | META: While your court application is pending, you remain under debt review and creditors generally cannot take legal action. Learn your rights during the process.
While your debt review removal application is pending in court, meaning the application has been filed but the order has not yet been granted, you remain legally under debt review. The protections of Section 88(3) of the NCA continue to apply. Creditors generally cannot institute or continue legal proceedings in respect of credit agreements that are under debt review.
During the 3 to 6 month period while your Section 87 court application is being processed, you retain the legal protection from creditor action that debt review provides. Creditors are aware that a court application is pending and must await the outcome before taking enforcement action.
This protection has limits:
• If you have stopped paying creditors entirely, neither debt review restructured amounts nor any direct payments, creditors may argue the debt review arrangement has broken down and apply to terminate it under Section 88(3) for their specific agreements.
• If a court has already granted a termination order for a specific account before your removal application was filed, that account is no longer protected.
• Accounts excluded from your original debt review plan are not protected.
Continue paying your creditors during the removal process, either through your debt review PDA or directly if you have already made that transition. This demonstrates good faith to the court and reduces the risk of creditors taking action during the application period.
Once the court grants your removal order, the protection ends and creditors resume full rights to enforce their credit agreements for any outstanding amounts.