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    What sections of the National Credit Act govern debt review removal?

    Four primary sections of the National Credit Act 34 of 2005 govern debt review removal.

    Section 71: Clearance Certificate

    Section 71(1) provides that a consumer whose debts have been re-arranged must be issued with a clearance certificate by a debt counsellor within seven days after the consumer has (a) satisfied all the obligations under every credit agreement subject to that debt re-arrangement order or agreement; or (b) demonstrated financial ability to satisfy future obligations under a mortgage agreement securing a credit agreement for the purchase or improvement of immovable property, and that there are no arrears on the re-arranged agreements, and that all obligations under every other credit agreement included in the re-arrangement have been settled in full.

    Plain language: once you have paid all accounts or only a current home loan remains, your debt counsellor must issue a clearance certificate within 7 days. Credit bureaus must then remove the debt review flag.

    Section 87: Court Order Rejecting Debt Review Proposal

    Section 87(1) provides that the Magistrate must conduct a hearing and having regard to the proposal and information before it and the consumer's financial means prospects and obligations, decide whether to reject the recommendation or otherwise.

    Plain language: if you are no longer over-indebted, you present your improved financial situation to a Magistrate who must reject the debt counsellor's restructuring proposal.

    Section 88: Effect of Debt Review

    Section 88(1) provides that a consumer who has applied for debt review must not incur any further charges under a credit facility or enter into any further credit agreement until one of the following events has occurred: (a) the debt counsellor rejects the application; (b) the court has determined that the consumer is not over-indebted; or (c) all obligations under credit agreements as re-arranged are fulfilled.

    Plain language: this is why the debt review flag blocks new credit. The restriction lasts until one of these legal events occurs.

    Section 165: Rescission of Orders

    Section 165 allows for rescission or variation of orders granted by the National Consumer Tribunal or a Magistrate's Court where the order was erroneously granted in the absence of a party; where the order contains an ambiguity, error, or omission; or where the order was made as a result of a mistake common to all parties.

    Plain language: if your debt review was formalised through a court or NCT order, this section is the route to having that order rescinded.

    Expert Answer

    Provided by NCR-registered debt counsellors (NCRDC3106)

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