NCR Debt Review Removal

Have you ever wondered what the National Credit Regulator says about debt review removal? In 2021, the NCR released new guidelines that amend uncertainties surrounding debt review exit. They did this by establishing case law via the Van Vuuren case. This page aims to concisely and simply explain amendments to debt review removal guidelines in the outdated National Credit Act (NCA).

Summary of Case Law

The Van Vuuren case established that consumers’ borrowing rights are effectively frozen upon debt review application. It also set out the following debt review removal guidelines:

  • A high court can’t decide that you’re no longer over-indebted. Meaning, they can’t release you from debt review.
  • When the creditors and court confirm you’re over-indebted, the high court isn’t the first place to be approached, the magistrate’s court is.
  • If you haven’t yet been ordered to rearrange your debts by the magistrate’s court, you and your debt counsellor can present a case of evidence that your application for debt review should be rejected.
  • If the magistrates court has already declared you overindebted, the only way out is compliance with Section 71 of the NCA, which means fully paying up, then applying for a clearance certificate.

New Definition of Debt Review

You’re under debt review if you’ve completed an application as per Section 86 of the National Credit Act. In December 2019, new case law indicated that consumers and debt counsellors must indicate when an application for debt rearrangement was made in Form 16.

If you complain to your debt counsellor that you didn’t apply for debt review, your counsellor must produce supporting documents and the completed Form 16 to indicate that you did. Should the NCR finds the application was not completed correctly, then they can advise you of the next steps.

If you’re found to be not overindebted, your debt counsellor will issue you Form 17(2) and update the Debt Help System. However, if your application was not rejected, your debt counsellor must apply to the court to rearrange your obligations or get a consent order from the NCT.

What the Law Says About When You Can Exit

You can exit debt review after your debt counsellor has determined you’re overindebted, but not after the court has declared you overindebted. If the court hasn’t made a decision yet, you and your debt counsellor can submit supporting evidence that you are not over-indebted and are able to make regular payments on your own.  Note that once a debt rearrangement order has been granted, you can no longer exit debt review.

NCR Debt Review Removal

If you need assistance exiting debt review, don’t hesitate to contact Cape Town Legal Consultants. Our lawyers are experts in debt review removal and can remove you from the process, hassle-free.