Getting out of debt review is quite difficult to do when you have other pending financial situations. Debt review can be a helpful process that protects you from creditors, but staying under it longer than necessary may restrict your financial freedom.
If you have been under debt review and are now financially stable, you may be wondering how to get off debt review and regain full control of your financial life.
With the increasing number of individuals under debt reviews in South Africa, this content will walk you through how to get off debt review legally without breaking financial laws.
Read Also: Under Debt Review And Need A Loan Urgently (Read Here)
What Is Debt Review?
Debt review is a legal process designed to help overindebted consumers manage their finances and repay their debts through a structured plan.
This measure was introduced in South Africa under the National Credit Act (NCA) in 2007 and has helped thousands avoid blacklisting or court action.
While you are under debt review, your debt counsellor negotiates lower payments with creditors. You make one consolidated monthly payment. Legal action is paused if the process is in place.
Lastly, you are listed on credit bureaus as “under debt review”. While debt review protects you, it also comes with limitations. You can not take out new credit until you’re officially cleared from the program.
Why You Might Want to Exit Debt Review
There are several reasons why someone might want to exit the debt review process. One is that you have fully repaid all your debts. Your income has improved, allowing you to manage your finances independently.
Also, because you want to buy a property, which may be a house or a car, and debt review is blocking your credit approval. Lastly, your circumstances have changed, and you no longer feel the need for managed debt repayment.
Exiting debt review is not a simple switch; it requires official steps to prove you are debt-free and financially responsible.
How To Get Off Debt Review
Getting out of debt review is a process that needs to be done accordingly, following particular steps. Let’s now break down the steps you need to take in order to get off debt review legally and officially.
1. Complete All Your Debt Payments
Before anything else, make sure all your debt obligations (excluding your bond/home loan) are fully paid to the lenders or cooperative you took them from.
Your debt counsellor should provide you with an updated statement showing zero balances. Make sure to keep all receipts and bank statements as proof of payment.
2. Request a Clearance Certificate
In order to get off debt review, you need to have paid off all debt once, and your debt counsellor must issue a clearance certificate, officially known as a Form 19.
This document certifies that you have paid all accounts listed in your debt review. Your bond is up-to-date (if applicable). Finally, you are no longer over-indebted.
Form 19 is mandatory and must be submitted to credit bureaus and the National Credit Regulator (NCR).
3. Ensure The Form Is Sent to the Credit Bureaus
After receiving your clearance certificate, your debt counsellor is legally obligated to send it to all credit bureaus. They will then remove the “under debt review” flag from your profile.
It is important to note that the Credit bureaus typically take 21 business days to update your credit status. So, do not be in a hurry to see changes immediately.
4. Confirm Removal From Credit Reports
After three weeks, get your free credit report from all major credit bureaus (like TransUnion, Experian, and Equifax) to confirm that the “under debt review” label has been removed.
If the under-debt review quote is yet to be removed, contact your debt counsellor and the bureau to escalate the matter. Don’t wait for anyone before communicating with the necessary office.
5. Rebuild Your Credit Score
Once you are officially off debt review, it’s time to rebuild your credit score. To do this, you need to pay all bills on time, get a small store account or credit card and repay fully every month.
Also, monitor your credit report regularly and avoid taking on large debts immediately. Getting out of debt review is just the beginning. Staying debt-free is the real goal.
Can I Exit Debt Review Without Paying All Debts?
No, you can’t, unless you can prove you are no longer over-indebted and a court agrees. If you entered debt review voluntarily, you can request to exit, but only through a court application.
A lawyer can help you submit a rescission application to terminate the debt review, arguing that you are now financially capable of handling your debts independently.
Even if approved, creditors may still demand immediate repayment. It is also important to note that cancelling debt review early may expose you to legal action from creditors. Proceed with caution and legal advice.
Tips to Speed Up Your Exit From Debt Review
Getting out of debt review can feel like a long road, but here are tips to help you exit sooner. These important tips are listed below.
1. Increase Monthly Payments
If you receive a salary increase or extra income, channel it into your debt repayments to finish sooner.
2. Pay Off Smaller Debts First
Use the snowball method to clear off small accounts quickly, then tackle bigger ones.
3. Avoid Skipping Payments
Missed payments delay your clearance certificate. Always pay on time; even one missed month can reset your progress.
4. Communicate With Your Debt Counsellor
Stay in touch regularly. A good debt counsellor will update you on your repayment progress and guide you on when to apply for clearance.
What To Expect After Debt Review
Once you are off debt review, things don’t return to normal immediately. There are certain financial portfolios that won’t remain the same.
The first is that your Credit score may be low. Even though you are debt-free, your score might still be low due to limited recent credit activity.
You will have limited Access to Credit (Initially). Banks may be hesitant at first. Start small and show consistent financial discipline.
Frequently Asked Questions (FAQs)
1. How Long Does It Take To Get Off Debt Review?
Most debt review processes take between 3 and 5 years, but you can finish sooner by increasing your monthly payments or paying off debts early.
2. Can I Exit Debt Review Without A Clearance Certificate?
No. You need a Form 19 clearance certificate from your debt counsellor to officially be removed from the credit bureaus’ debt review list.
3. Will My Credit Score Improve After Debt Review?
Yes, but not immediately. Once the debt review status is removed, you will need to rebuild your credit history.
4. Can I Apply For Credit While Under Debt Review?
No. While under debt review, you are legally restricted from taking on new credit. That’s one reason many people want to get out of it quickly.
5. Is Debt Review The Same As Blacklisting?
No. Debt review is a legal protection process, while blacklisting usually refers to court judgments or bad credit listings due to non-payment. Debt review can actually help prevent blacklisting.
Conclusion
Getting a debt review is an important step for every individual. It means you have regained control of your finances and are ready to move forward.
By following the proper procedures listed in this content, which include clearing debts, obtaining a clearance certificate, and rebuilding your credit, you can enjoy full financial freedom once again.
Do not be tempted to skip the steps or cancel your debt review early unless you have received sound legal advice.
