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Debt Review Removal

Debt Review is not a life sentence! 

In the Janse van Vuuren Judgement of 2019, two different cases were referred to the High Court of South Africa, Johannesburg which depicts the following two different scenarios:

 

  • In the one case, the individual’s financial circumstances improved prior to the Debt Review Order being Granted.
  • In the second case, the individual's circumstances improved after a Debt Review Order was obtained in terms of the National Credit Act & Regulations.

 

It was held that where an individual’s financial circumstances has improved substantially prior to the Order being granted, the individual may provide his/her Debt Counsellor with the new information who must then evaluate same and present it to Court who may then reject the initial proposal and find that the individual in actual fact no longer has any need for Debt Counselling based on the new information. 

 

It was further held that, in a case where a Court Order was obtained, the only remedy available to the individual to exit debt review, is as stated in Section 71(1) of the National Credit Act, which reads as follows:

 

  1. A consumer whose debts have been re-arrangenged in terms of Part D of this Chapter, must be issued with a clearance certificate by a debt counsellor within seven days after the consumer has-
  1. Satisfied all the obligations under every credit agreement that was subject to that debt re-arrangement order or agreement, in accordance with that order or agreement; or
  2. Demonstrated- 
  3. Financial ability to satisfy the future obligations in terms of the re-arrangement order or agreement under-

(aa) a mortgage agreement which secures a credit agreement for the purchase of improvement of immovable property; or

(bb) any other long term agreement as may be prescribed;

  1. That there are no arrears on the re-arranged agreements contemplated in subparagraph (i); and
  2. That all obligations under every credit agreement included in the re-arrangement order or agreement, other than those contemplated in subparagraph (i) have been settled in full.”

 

This then means that a Clearance certificate may be issued in the following circumstances:

  1. If all debts included in the Debt Re-arrangement Order has been settled;
  2. If all debts included in the Debt Re-arrangement Order has been settled, except for a mortgage agreement which has no arrears and the consumer can afford to pay the original contractual agreement on the mortgage agreement;
  3. If all debts included in the Debt Re-arrangement Order has been settled, except for a long term credit agreement which has no arrears and the consumer can afford to pay the original contractual agreement on the long term credit agreement.

 

We are well versed with the limited options available for a Consumer to be removed from Debt Review and fully equipped to assist such individuals who find themselves in the position where they may be removed.

We do not close our file until we are certain that the Credit Bureaus and Credit Providers have updated their records to the effect that the Consumer is no longer under Debt Review and are satisfied that the Consumer is not experiencing any issues due to their previous Debt Counselling status.  

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