Exiting debt review is not a simple cancellation. Once you’re in debt review, it remains on your credit record unless you meet specific conditions outlined by the law. Here’s what you need to know to understand your options.
1. Initial Assessment Period
- Early Rejection of Debt Review: If you’ve just entered debt review and completed the initial application (Form 16), your debt counsellor will evaluate your financial status within the first 30 days. If they determine that you are not over-indebted, they must issue a Form 17.2, ending your debt review before it proceeds further.
2. With a Debt Review Order
- Paying Off All Debts: If a debt review court order is in place, you must settle all debts listed in the order. Once all debts are paid in full, you can obtain paid-up letters from your credit providers. A registered debt counsellor can then issue a Form 19 clearance certificate, which allows the credit bureau to update your status and remove the debt review listing.
3. Without a Debt Review Order
- All Debts Paid Off: If there is no formal court order but you’ve paid off all debts, you can still receive a Form 19 clearance certificate from a debt counsellor, provided you have paid-up letters from your creditors.
- Improved Financial Situation: If you don’t have a court order and haven’t paid off all debts, but your financial situation has improved, a debt counsellor can reassess your case. If they can confirm that you are no longer over-indebted and all your credit agreements are up to date, you may apply to the court for an exit from debt review. Note, however, that if you are in default, the court will likely deny the exit.
4. Beware of “Debt Review Removal” Offers
- Some companies may claim they can remove you from debt review. However, if they promise an immediate or easy exit, they are offering a service that is not legal. Only by following the above legal paths can debt review status be changed.
Understanding these steps can help you avoid scams and manage your debt responsibly. If in doubt, consult a registered debt counsellor to explore the correct approach for your situation.
This blog post was inspired by and made possible thanks to the valuable insights of Renee Marais and Michelle Barnardt, as well as the Debt Review Consumer Questions Facebook Group. We sincerely appreciate their dedication to educating the community and supporting those facing challenges with Debt Review. Your knowledge has been instrumental in helping us all learn and grow. Thank you for your continued guidance!