Debt review is a process designed to assist over-indebted individuals in South Africa by restructuring their debt repayments. However, there may come a time when a consumer wishes to be removed from debt review. This article explores the procedure for debt review removal applications, the relevant legal framework, and the leading case that guides this process.
What is Debt Review?
Debt review is a legal process introduced by the National Credit Act (NCA) to help over-indebted consumers repay their debts in a manageable way. A debt counsellor assesses the consumer’s financial situation and proposes a debt repayment plan to creditors. Once all parties agree to the plan, it is submitted to the court for approval
Removal from Debt Review
There are various circumstances under which a consumer may seek removal from debt review:
- No Court Order Granted: If you have consulted with a debt counsellor and have been flagged as being under debt review, but no court order has been granted, you are not necessarily stuck under debt review. You can apply for removal from debt review status by demonstrating to the credit bureaus that no court order exists.
- Court Order Exists: If a court order has been granted, the process becomes more complex. You must apply to the court to have the order rescinded or varied. This typically involves demonstrating that you are no longer over-indebted and can manage your debt repayments independently.
Consequences of Debt Review Removal
The consequences of a successful debt review removal application include:
1. Credit Bureau Update: Once removed from debt review, your status will be updated with the credit bureaus, potentially improving your credit score.
2. Resumption of Normal Credit Agreements: You can resume entering into credit agreements without the restrictions imposed by debt review.
3. Direct Repayments: You will be responsible for managing your debt repayments directly with your creditors, without the mediation of a debt counsellor.
Who May Be Removed from Debt Review?
Individuals who may be removed from debt review include:
1. Consumers with No Court Order: Those who were flagged as under debt review but have no court order can apply for removal through the credit bureaus.
2. Consumers with a Court Order: Those who can demonstrate improved financial circumstances and an ability to manage debt repayments independently may apply to the court for removal from debt review.
Seeking Legal Assistance
Navigating the debt review removal process can be complex and requires a clear understanding of the legal requirements and procedures. At Kamfer Attorneys Incorporated, our experienced legal team can assist you with debt review removal applications, ensuring that your case is handled efficiently and effectively.
