How to Remove Debt Review From Your Name

Navigating financial difficulty can be a challenging experience, often leading individuals to seek structured solutions for managing overwhelming debt. One such solution, known as debt review, offers a legal pathway for consumers to regain control of their finances and work towards a debt-free future. While providing immediate relief and a clear repayment plan, debt review also places a status on an individual’s financial record that can limit access to new credit. This article aims to guide readers through the process of removing this status, detailing the necessary conditions and procedural steps to clear a financial record once debt obligations are met.

Understanding Debt Review Status

Debt review, also known as debt counseling, is a formal legal process established under the National Credit Act in South Africa. It is designed to assist consumers who find themselves over-indebted and unable to meet their monthly financial commitments. A registered Debt Counsellor assesses an individual’s financial situation, including income, expenses, and existing debt obligations, to determine if they qualify for this process.

Once an individual enters debt review, they receive immediate protection from legal action by creditors, such as asset repossessions or harassment. The Debt Counsellor negotiates with creditors to restructure the debts, often resulting in reduced interest rates and lower, more affordable monthly installments. These restructured payments are typically consolidated into a single monthly payment made to a Payment Distribution Agency, which then disburses funds to the various creditors.

While under debt review, an individual’s credit record is flagged to indicate their participation in the process. This flag prevents the individual from incurring new debt, including applying for loans or credit cards. This restriction protects the consumer from accumulating further debt while repaying existing obligations. The status remains on the credit profile until the debt review process is officially concluded and cleared.

Conditions for Debt Review Removal

Before an individual can begin the process of removing debt review from their name, specific conditions must be satisfied, signaling that they have successfully addressed their financial obligations. The primary and most significant condition is the full payment of all restructured debts included in the debt review. This means every short-term credit agreement, such as personal loans, credit cards, and vehicle finance, must be settled completely.

An exception exists for long-term debts like a home loan, which has specific handling within the debt review framework. While all other debts must be paid in full, a consumer can obtain a clearance certificate even if a home loan remains outstanding. For the home loan, payments must be up to date according to the restructured or original terms, and the account must not be in arrears.

The Debt Counsellor verifies that these payment conditions have been met. They will typically request “paid-up letters” from all creditors to confirm that the respective debts have been settled in full. These letters serve as official proof that the consumer has honored their repayment plan. Without these confirmations, the process of obtaining a clearance certificate cannot proceed.

Furthermore, any fees owed to the Debt Counsellor must be fully paid. The National Credit Regulator (NCR) sets guidelines for these fees, ensuring transparency and fairness. Only once these conditions are met is an individual considered eligible to exit the debt review process.

The Process of Obtaining a Clearance Certificate

Once all conditions for debt review removal have been met, the formal process of obtaining a Clearance Certificate, also known as a Form 19, can begin. This certificate is a legal document confirming that the consumer has fulfilled all obligations under the debt review arrangement. The process is initiated by notifying your Debt Counsellor that all relevant debts have been paid off.

The Debt Counsellor then plays a central role in verifying these payments by collecting paid-up letters from all creditors. After confirming that all debts (excluding a home loan, if applicable, which must be up-to-date) are settled, the Debt Counsellor prepares and submits Form 19 to the National Credit Regulator (NCR). The NCR, the regulatory body overseeing the credit industry, verifies that all debts are cleared before issuing the official Clearance Certificate.

If the debt review was made an order of the court, an additional step involving a rescission application to the Magistrate’s Court is necessary. This application seeks to have the original court order, which formalized the debt restructuring, set aside. The individual or their legal representative must demonstrate to the court that they are no longer over-indebted and have fulfilled their obligations. Required documentation for this application typically includes proof of payment for all debts and a copy of the original debt review court order. Once the court grants the rescission order, the NCR and all existing creditors are notified, further solidifying the removal of the debt review status.

Updating Your Credit Record

After obtaining the Clearance Certificate, the final step involves ensuring credit bureaus accurately reflect the removal of the debt review status from your financial record. The Debt Counsellor has a responsibility to inform credit bureaus of the clearance. They are required to submit the Form 19 Clearance Certificate, along with the paid-up letters from creditors, to all major credit bureaus.

Consumers should independently verify that their credit record has been updated. This can be done by requesting a free credit report from each of the major credit bureaus, typically available once per year. Reviewing these reports allows individuals to confirm that the debt review flag has been removed and that their accounts are accurately marked as settled.

If the debt review status is not removed promptly, or if any incorrect information appears on the credit report, the individual has the right to dispute it with the credit bureaus. This dispute process generally involves submitting a copy of the Clearance Certificate and, if applicable, the court’s rescission order, to the credit bureau. They are legally obligated to investigate and correct any inaccuracies within a specified timeframe.

Credit bureaus typically take between 7 to 20 calendar days, or up to 21 business days, to update a credit profile once they receive the Clearance Certificate. Monitoring the credit report for several months after clearance is advisable to ensure all settled accounts are correctly reflected and no lingering negative entries remain.