According to the National Credit Regulator “South Africans are some of the most over-indebted consumers in the world.” It is for this reason that debt review was instituted to protect, rehabilitate and assist over-indebted consumers. Under the National Credit Act, debt review is a legal process which assists hundreds of thousands of consumers each year. The debt review process assists the consumer in managing debt affordably. The process has several benefits:
● Assists the consumer to pay their debt off in an affordable manner.
● Creditors are no longer allowed to contact the consumer.
● The debt review process has no limits on how many accounts can be added.
● The consumer’s assets, i.e., house, car, goods are protected.
● There is only one monthly payment to be made.
Under What Circumstances is a Debt Review Clearance Certificate Issued
According to section 71 of the National Credit Act 34 of 2005 as amended (“The Act”), once you have completed your debt review process you will be issued what is known as a clearance certificate. There are many legal factors which influence the ability to receive a clearance certificate. These factors are as follows:
● A clearance certificate may only be issued when all short-term debt under debt review is settled in full. The only exception is a bond on your home. Your bond must however be paid up to date and have no arrears on the account for it to be eligible. One important factor to take note of is that if you lapse in your debt review payments, it may be very possible that you will also fall behind on your bond.
● All debt counselling fees must be settled, and you should have no outstanding amount on your account.
● The time frame around the issuing of a clearance certificate is not set in stone. Multiple factors affect the process and many of these factors are out of the hands of debt counsellors.
Life After Receiving Your Debt Review Clearance Certificate
While you are under the protection of debt review, you may not obtain more credit. Once you receive your clearance certificate, and the various South African credit bureaus have updated your credit record, you are eligible to apply for credit freely.
Many consumers run head on into purchasing massive items with large repayment terms and simply find themselves in a whirlpool of debt again. We strongly advise that you start small. Build up your credit record and become financially savvy by being clued up through financial education channels, money-wise platforms, and plan everything cent that you spend.
Just Before You Go
Debt Rescue has been in the debt review industry for the past 14 years. We understand the legal processes involved throughout the debt review journey. Our passion for helping over-indebted consumers reach their financial goals is what drives our business. We have an expert customer care line dedicated to helping you navigate your debt review journey.