Struggling to exit Debt Review in South Africa? This comprehensive guide answers the top 55 frequently asked questions about Debt Review Removal in South Africa. Find out how to clear your record, manage outstanding debts, and regain financial freedom.

Debt Review Removal in South Africa is governed by the following sections of the National Credit Act;

• Section 86(7)(a) on the National Credit Act (NCA) deals with debt review rejections.
• Section 71 of the National Credit Act (NCA) deals with debt review clearance certificates
• Section 87 of the National Credit Act (NCA) deals with the removal of debt review after you have been declared overindebted by a debt counsellor.
• Section 165 of the National Credit Act (NCA) deals with the removal of debt review if there is a debt review court order in place.

By Sibabalwe Dakana – The National Debt Review Center

Frequently Asked Questions about Debt Review Removal in South Africa – Answered

15. Do I need to be present in court for my debt review removal application?

Yes, if you will be self-representing but if you are represented by your debt counsellor or the debt counsellor is the applicant then the consumer does not necessarily have to be present in court.

The consumer must facilitate the process where required, typically by providing required information and documentation.

16. Can I cancel my Debt Review and continue to pay directly 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.

17. Once Debt Review is terminated, creditors cannot take legal action to recover debts.

Section 88 (3) of the National Credit Act (NCA), 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.

18. Can I remove debt review myself?

Removing debt review typically requires professional assistance, especially if it involves legal proceedings or negotiations with creditors. If there are issues with your debt counsellor or if they’re no longer practicing, you may need to seek assistance from the NCR or another registered debt counsellor.

19. When can a credit provider terminate debt review?

A credit provider can terminate the debt review process if you fail to meet the agreed-upon terms, such as missing payments. They have the right to issue a Section 86(10) notice, withdrawing from the debt review and proceeding with legal action to recover the debt.

20. Is debt review a criminal record?

No, being under debt review is not a criminal record. It is a legal process aimed at helping individuals manage their debts more effectively. However, it does affect your credit record and your ability to access further credit while under review.

21. What happens when you cannot pay your debt review?

If you cannot pay according to the restructured plan under debt review, your credit providers might terminate the debt review and take legal action to recover their money. This can lead to judgments against you and further impact your credit score.

22. Is it true that after 7 years your credit is clear?

In South Africa, negative information on your credit report generally stays for a period of up to 5 years. This includes information like missed payments or judgments. After this period, the information should be removed, improving your credit score. However, this does not mean your debts are written off or cleared after 7 years.

You will need to review your credit report and confirm.

23. Can I get a loan after being removed from debt review?

Yes, once you have been removed from debt review you can apply for credit again. However, the decision to grant a loan will depend on your credit score and financial situation at the time of application.

24. How much does it cost to remove debt review in South Africa?

The cost of removing debt review varies and can depend on several factors, including the complexity of your case and the fees charged by your debt counsellor or legal advisor. The National Debt Review Center have a set fee of R8550.00 to for their removal applications. This fee can be arranged and paid over 2-3 months.

25. Can I buy a car immediately after debt review?

After completing debt review, you can apply for credit, including car finance. However, whether you can buy a car immediately depends on your current credit score and financial status. Lenders will assess your creditworthiness post-debt review before approving any loan.

26. Which bank can help with my debt review or debt review removal?

Most major banks in South Africa work with the debt review process. This includes banks like ABSA, Standard Bank, Nedbank, and First National Bank (FNB). They have departments dedicated to handling debt review cases and can work with your debt counsellor. The National Debt Review Center work with all registered credit providers.

27. How long does the debt review flag stay on your name?

The debt review flag remains on your credit profile until you have completed the debt review process or have obtained an order declaring you no longer overindebted. Once this certificate or order is issued, credit bureaus are required to remove the debt review flag from your credit profile, typically within 21 days.

28. What are the disadvantages of debt review?

Disadvantages include restricted access to further credit during the review period, potential long-term impact on your credit score, and the possibility of paying more over time due to extended payment terms. It also involves fees for the debt counsellor’s services.

29. What are the disadvantages of debt review removal?

Removing yourself from Debt Review requires a clear plan and the commitment to handle your finances responsibly. You become solely responsible for managing your remaining debt. Sticking to a strict repayment plan is crucial to avoid falling behind again.

Exiting Debt Review removes the legal shield it provides. Creditors will regain the ability to pursue legal action for outstanding debts, including:

• Court summons
• Wage garnishment
• Asset repossession

This significantly increases the pressure to manage your repayments diligently to avoid such consequences.

30. Can I apply for a house while I am under debt review?

No.

While under debt review, you are generally not allowed to incur any additional debt, which includes applying for a home loan. Your focus during debt review is to settle your existing debts as per the restructured plan.

31. How do I remove debt review status in South Africa?

To remove the debt review status, you need to contact The National Debt Review Center on 0410125036. They are considered as the best debt review removal company in South Africa.

32. What is the red flag on debt review?

The “red flag” on debt review refers to the indicator on your credit report that shows you are under debt review. This flag alerts creditors that you are undergoing a debt restructuring process and cannot access more credit during this period.

33. How do I check my debt review status?

To check your debt review status, you can request a copy of your credit report from a credit bureau, which will indicate if you are under debt review. You can also contact your debt counsellor or the National Credit Regulator (NCR) for this information.

34. Can I Cancel Debt Review?

Yes, it is possible to cancel debt review. However, it is important to note that debt review is a legal process that provides debt relief to consumers who are over-indebted. Cancelling debt review prematurely may result in legal and financial consequences, such as the resumption of legal action by creditors and the loss of the benefits provided by debt review. Therefore, before making the decision to cancel debt review, it is advisable to consult with a qualified debt counsellor or attorney who can guide you through the process and explain the potential implications.

Book an appointment with The National Debt Review Center

35. What are the Implications of Cancelling Debt Review?

1. Cancelling debt review means losing the legal protection against creditors, who may then proceed with legal action for debt recovery.
2. Exiting debt review before clearing your debts can negatively impact your credit score, making it harder to obtain credit in the future.
3. Without the structured repayment plan, you may find it challenging to keep up with debt payments, leading to potential financial strain.

Before cancelling, it’s advisable to speak with a debt counselling expert. They can provide clarity on:

• The legal process of exiting debt review.
• How cancellation might affect your current financial situation and future creditworthiness.
• Alternative strategies to manage your debts without exiting the debt review prematurely.

Cancelling debt review is a significant decision with long-term financial implications. Thoroughly weigh the pros and cons and consider seeking professional advice to ensure you’re making an informed decision that aligns with your financial goals and capabilities.

36. What are the Benefits of Staying Under Debt Review?

1. While under debt review, creditors cannot take legal action against you for debt recovery, which provides significant financial relief.
2. Debt review offers a manageable repayment plan that fits within your budget, allowing you to repay your debts in a more organized and less stressful manner.
3. Often, debt review results in reduced monthly payments, making it easier for you to manage your finances.
4. Debt Counselling encourages financial discipline and better budgeting skills, as you are required to stick to the agreed-upon repayment plan.

37. Which is the best debt review removal company in South Africa?

The National Debt Review Center is considered the best debt review removal company in South Africa. They were among the first debt counselling companies to handle this process, which was traditionally managed solely by attorneys who then later sent the documents to debt counsellors or the NCR to request updates.

The National Debt Review Center (NDRC) has played a significant role in shaping the landscape of debt review removal services in South Africa. They were among the first debt counselling companies to enter this field, traditionally reserved solely for attorneys.

NDRC’s approach to debt review removal differs from some solely attorney-driven processes. They advocate for debt counsellors being involved in the initial stages to ensure a comprehensive and proper understanding of the individual’s financial situation. While an attorney’s expertise is crucial for court appearances to obtain the debt review removal order, NDRC emphasizes the involvement of a debt counsellor throughout the process.

Following the successful court order, the attorney returns the case to the debt counsellor. This ensures a smooth transition and empowers the debt counsellor to handle the crucial task of updating credit bureaus, the National Credit Regulator (NCR), and creditors, reflecting the successful removal of debt review. This comprehensive approach stands in contrast to some attorneys who might not involve debt counsellors throughout the entire process.

38. Who qualifies for debt review removal?

Individuals in South Africa who meet the eligibility criteria outlined in the National Credit Act (NCA) and the National Credit Amendment Act (NCA Amendment Act) qualify for debt review removal.

• Section 86(7)(a) on the National Credit Act (NCA) deals with debt review rejections.
• Section 71 of the National Credit Act (NCA) deals with debt review clearance certificates
• Section 87 of the National Credit Act (NCA) deals with the removal of debt review after you have been declared overindebted by a debt counsellor.
• Section 165 of the National Credit Act (NCA) read together with Section 28 of the National Credit Amendment Act of 2019 deals with the removal of debt review if there is a debt review court order in place.

39. How do I know if my debt review flag has been removed?

• The NCR debt help system status code will be updated to B or G or G1 or F2 or F1
• The debt review listing will be removed from your credit profiles.
• Your creditors will send you confirmation that the listing is also removed from their systems.
• Your debt counsellor will send you confirmation.

40. What are the definitions of the NCR DHS Status Codes?

• Status Code : A – Applied for debt counselling and being assessed
• Status Code : A1 – Voluntary withdrawal by consumer prior to being declared over-indebted
• Status Code : B – Assessment has resulted in a rejection
• Status Code : C – Assessment has resulted in a decision that the consumer is over-indebted
• Status Code : D3 – Formal debt re-structuring through the courts has commenced
• Status Code : D4 – Formal debt re-structuring is completed, and a court order granted
• Status Code : F – DC declares that the consumer is no longer over – indebted
• Status Code : F1 – All restructure have been settled except mortgage agreement
• Status Code : F2 – All restructure debts have been settled
• Status Code : G – Magistrate rescinded the debt review court order/consumer opposed debt review application and has been declared not over-indebted. (Option C on Form 17.W)
• Status Code : G1 – Application for debt review rejected by Magistrate – not over indebted. (Option D on Form 17.W)
• Status Code : I – Consumer deceased

41. Can I apply for debt review removal online?

Yes.

42. Will there be something showing that I was under debt review after I have successfully exited debt review?

Generally, no. Once you’ve successfully completed the debt review removal program your credit report shouldn’t explicitly mention your past involvement in debt review.

43. Does debt review removal affect the eligibility for future business loans?

Debt review removal itself will not directly hinder your eligibility for business loans. Once you have successfully completed the debt review removal program your credit report shouldn’t explicitly mention your past involvement in debt review.

44. Are there any tax implications associated with debt review removal?

No.

However, tax implications can vary depending on the specific situation. Consulting a qualified tax advisor is essential for accurate information.

45. Can I renegotiate the terms of remaining debt (e.g., interest rates) with creditors after exiting debt review?

Exiting debt review doesn’t prevent you from negotiating with creditors directly. However, please be advised that you will be obligated to revert back to the original terms. This therefore means you will no longer enjoy the benefits of reduced installments and interest rates.

46. If I qualify for partial removal due to a remaining home loan, can I re-enter debt review if I encounter further financial difficulties?

This scenario requires consultation with a debt counsellor. They will assess your financial situation and determine if re-entering debt review is a viable option.

47. How is debt review removal handled if the individual under debt review passes away?

Upon receiving all necessary documents, the debt counsellor will update Status Code : I – Consumer deceased.

Notify all relevant parties, check and attend to all credit & life insurance document submissions and the deceased estates administration process will commence.

Remember: Consulting a legal professional specializing in estate administration is crucial.

48. Can creditors take legal action to recover outstanding debts while the debt review removal process is ongoing?

Creditors might still pursue legal action if they have legitimate reasons, such as terminations or breaching a court order issued during debt review. 

49. Does a history of debt review or the removal process impact the ability to travel internationally?

Debt review history or removal shouldn’t directly restrict your ability to travel internationally.

50. Following debt review removal and consistent responsible financial management, how long does it typically take to see a significant improvement in credit score?

Several factors influence credit score improvement, including:

• Repayment behavior: Consistent on-time payments significantly improve your score.
• Credit utilization ratio: Keeping your credit card balances low is crucial.
• Length of credit history: A longer history of responsible credit management benefits your score.

You will therefore see a significant improvement immediately once the bureaus confirm that the listing is removed. This is usually 21 business days after the NCR has confirmed the validity of the documents.

The score will continue to increase when you adhere to the abovementioned factors that influence the credit score improvement.

51. Are there alternative solutions for individuals seeking to exit a debt review program if they don’t meet the full criteria for debt review removal.

Yes.

• Sequestration: This is a formal insolvency process overseen by the Master of the High Court. It involves surrendering your estate’s assets to a trustee who then distributes them proportionally to creditors. Important Note: Sequestration has significant consequences, including potential limitations on future credit applications and business ventures. Consulting a qualified legal professional specializing in insolvency law is crucial before considering this option.
• Administration Order: This is a less severe alternative compared to sequestration. An administrator appointed by the court manages your debt repayment plan, allowing you to retain control of your assets while making regular installments to creditors over an extended period. 

52. What are the implications of debt review removal for an individual who co-signed on a debt (e.g., spouse or family member)? Will their credit report also reflect the removal?

Debt review removal primarily applies to the individual who directly participated in the program. However:

• The co-signer’s credit report might still reflect the original debt even if the primary debtor exits debt review.
• The co-signer remains liable for the debt if the primary debtor defaults after removal.

53. If one spouse in a marriage exits debt review, can it positively or negatively affect the other spouse’s credit score, especially if they have joint accounts?

Debt review removal by one spouse generally shouldn’t directly impact the other spouse’s credit score unless both parties were placed under debt review.

54. If an individual believes their credit report contains inaccurate information regarding debt review or the removal, what steps can they take to rectify the issue?

The National Credit Act (NCA) grants consumers the right to dispute any errors on their credit report. They can contact the credit bureau directly to initiate the dispute resolution process.

55. Does debt review removal automatically cover the settlement of any outstanding fees? (i.e debt counselling fees)

Debt review removal doesn’t automatically cover any outstanding fees associated with the debt review process.

Settling any outstanding debt counsellor fees is crucial to ensure a smooth and timely transition during the debt review removal process. This aligns with the National Credit Regulator’s (NCR) fee guidelines and minimizes the potential for delays or unnecessary objections.

Do you Have More Questions? Book a Free Consultation with a Debt Review Removal Expert