Beyond Debt Review: A Guide to Financial Freedom

Debt review can be the difference between having free and fair access to credit or being financially restricted. Without the right to credit – which is restricted during debt review – applying for a mortgage, vehicle finance, and other finance like personal loans is impossible. This is because, under debt review, no one is allowed to lend you money, as this is reckless credit under the National Credit Act. Reckless credit is when a creditor lends you money despite knowing that you can’t afford it or that you’re a high default risk.

In this post, we’ll discuss how to get credit clearance after debt review and how to exit debt review with Form 17.2 (W). Cape Town Legal Consultants will outline its legal and financial implications, the process, and how credit clearance professionals and attorneys can help you make the process as hassle-free and easy as possible.

Financial Freedom After Debt Review

After you’ve finished making repayments during debt review, you’re allowed to request a credit clearance certificate, also called a Form 19. You can use this certificate to dispute your debt review status and all the debts that necessitate debt review, such as defaults, late payments, and your debt-to-income ratio.

To begin the process, ask your debt counsellor for a clearance certificate. This is a certificate stating you have paid all your creditors back as agreed and are no longer over-indebted. If your debt counsellor refuses to give you this, you can complain to the High Court, who can order your debt counsellor to issue you a clearance certificate.

If you don’t want to go to the High Court, you can request that the National Finance Ombudsman Scheme help you liaise with your debt counsellor and obtain a clearance certificate.

Writing to the Bureaus and Credit Clearance

After you have your clearance certificate (Form 19), you should write a dispute letter to the credit bureaus stating that you would like to dispute the debt review flag and the debts that led to it. To do this, you should write a dispute letter and include identification, proof of residence, and your clearance certificate.

The bureaus have 21 to assess your dispute and provide a verdict. If they don’t approve your request your credit clearance request, we’ll help you apply to the National Finance Ombudsman Scheme, which can apply to the court on your behalf to help you get an order that mandates the bureaus clear your record.

After your credit record is clear, you can begin rebuilding your credit report responsibly with debt orders or a secured credit card.

Discover how withdrawing from debt review or requesting a clearance certificate can be the path to financial freedom.

Financial Freedom During Debt Review

If you can pay your credit agreements as initially agreed and are no longer over-indebted, you can apply to withdraw from debt review. To do this, your debt counsellor must file a Form 17.2 (W), stating that you’re able to afford initial payment agreements or that your financial circumstances have changed. After the form has been approved, you can use it to dispute the flag on your credit report and begin rebuilding your credit.

Note that once you have withdrawn from debt review, you will no longer have the legal protection it offers from creditors or the reduced interest rates and repayments. If you default, you’ll be subject to a letter of demand (section 129) and possibly, a judgment and its legal repercussions.

How Cape Town Legal Consultants Can Help

If you would like help writing a credit clearance dispute letter, appealing to the Ombudsman or high court, or withdrawing from debt review, contact Cape Town Legal Consultants. We would love to help you reach financial freedom.