Understanding The Debit Review Process

The purpose of this article is to shed light on the debt review process and explain its significance for consumers.

Debt Review is initiated through an application under section 86 of the National Credit Act 34 of 2005, resulting in:

– Prevention of creditors from taking legal action to recover debts owed by the consumer;

– Limitation on the consumer’s ability to obtain credit from recognized credit providers (no new loans or new account applications);

– Restructuring of debts and adjustment of monthly payments based on the consumer’s income, taking into account essential living expenses and any remaining income.

Upon establishing that a consumer is over-indebted as per Section 86(6)(a) of the National Credit Act, the debt counsellor will mark a “flag” or entry of the debt review on the credit bureaus

When the consumer applies for debt review, it will be recorded in their credit bureau record. If the consumer later chooses to cancel the debt review, the debt counsellor cannot simply remove the flag unless all debts are settled. However, the consumer has the option to seek the removal of the flag by approaching the Magistrate’s Court.

An application to remove “Debt Review” Flag on credit record (also known as debt review upliftment) can be done by approaching the Magistrates Court, only when the debt restructuring proposal has not yet been made an order of Court in accordance with Section 86(7)(c) of the National Credit Act, can the application to the Magistrate’s Court be submitted.

We are here to assist you with the process of referring an application in accordance with Section 87(1)(a) of the National Credit Act to the Magistrate’s Court. [ADD A CONTACT LINK HERE]

WHAT HAPPENS WHEN A COURT ORDER FOR A DEBT REVIEW HAS BEEN GRANTED?

Upon receiving a debt review order, a consumer is not allowed to terminate or withdraw from the debt review process. However, they do have the option to seek Court intervention to either rescind the order or request a new order declaring that the consumer is no longer over-indebted. Subsequently, a new Court Order must be obtained based on the previous Court application

After the rescission has been granted, the order can then be submitted to the debt counsellor for the removal of the record from the Credit Bureau

Contact our office for support in filing an Application for the Rescission of a debit review judgment in the Magistrate’s Court