14 Feb Can I Cancel My Debt Review While I Still Have Debt?

If you still have debt and are under debt review, you may have wondered whether you can cancel debt review. You can only “cancel” debt review under specific circumstances: before you’ve declared over-indebted by the courts, when you’ve fulfilled all obligations under the debt review agreement, or if your application was incorrectly filed. You can’t voluntarily exit debt review once you’ve been declared over-indebted.

The NCA and Amendment 19 of 2014 state, “A consumer whose debts have been re-arranged in terms of Part D of this Chapter, [may apply to a debt counsellor at any time for a clearance certificate relating to that debt re-arrangement] must be issued with a clearance certificate by a debt counsellor within seven days after the consumer has— (a) satisfied all the obligations under every credit agreement that was subject to [the debt re-arrangement]” (section 71)

If a Magistrate has already granted a debt rearrangement order, section 71 of the NCA regulates the only route to exit the debt review. This means that where a debt re-arrangement order is in place, you are to repay all debt (excluding home loans or long-term agreements).

Technically, this means you can exit debt review once your accounts are no longer in arrears, but you should ask your debt counsellor about this.

This post discusses when you can and can’t exit debt review whilst you still have debt, including what the law says.

Circumstances under Which You Can Exit Debt Review

Debt review removal legislation — the NCA — says you can’t exit debt review while you still have debt in section 71; however, case law states differently. The NCA is quite open-ended when discussing the circumstances under which you can exit debt review, so attorneys use purposes of Acts and case law – precedents – to determine how they might best argue for your release.

The NCR’s guidelines for withdrawal from debt review say, “note that the NCA, its regulations, or case law will take precedence over provisions made in these guidelines and will, where necessary, be amended.”

Before You’re Declared Over-Indebted

The NCR’s guidelines state, “A consumer who is not yet the subject of a Magistrates’ Court debt re-arrangement order in terms of section 87 of the NCA, may together with the proposal of the debt counsellor present the additional facts to the court to bring about a rejection of the proposal. If the proposal is rejected by the Magistrate, every credit provider and every credit bureau should be notified of the relevant order. This means that in cases where debt re-arrangement order has not yet been granted, the debt counsellor and consumer must place the new facts in front of the Magistrate who can then declare the consumer not over-indebted.”

In summary, the law and guidelines say that you can exit debt review if you disprove your debt counsellor’s claims before you’re declared over-indebted by the Magistrate’s court.

The Debt Review Application Was Incorrectly Filed

If the debt review application did not follow the prescribed filing guidelines, the National Credit Regulator may issue a finding that you did not apply for debt review, which will end the debt review process.

You must:

• Give your debt counsellor information about your finances (debt, income, expenses, marital status)
• You must have signed Form 16
• Your debt counsellor must have used the task team agreement, specifically Annexure B, as guidelines for conducting the affordability assessment
• Your debt counsellor must have compiled a certificate of balance (COB)
• They must have completed the assessment of your financial position within five business days after you provide the Form 16 information

If your debt counsellor did not complete all of these steps, you can apply for a debt review rescindal from the Magistrate’s court. You can read more about this in regulation 24(1)(b) of the the NCR’s guidelines.

Note that there are no voluntary withdrawal guidelines in the NCA. If your case does not meet these criteria, you can’t exit debt review. Our legal professionals can help you with the court process of debt review removal.

We Can Help You Cancel Debt Review While You Still Have Debt

Enlist Cape Town Legal Consultants to help you exit debt review while you’re indebted. We can assess the circumstances under which your application was submitted and whether your debt re-arrangement order has been issued.

Contact us today and discover a life without debt review. Take control.