Debt review, also known as debt counselling, is a formal debt relief option designed to help individuals struggling with overwhelming financial obligations. It offers protection against legal action by creditors while allowing debtors to repay their outstanding balances under revised, more manageable terms. While debt review provides much-needed relief during financial crises, there comes a time when individuals wish to exit this process and restore their financial freedom. This is where debt review removal becomes a vital service.
In this article, we’ll explore what debt review removal entails, why it’s essential for your financial future, and how to go about it.
What is Debt Review Removal?
Debt review removal is the process of officially exiting the debt review system once all your debt has been paid off or if your financial situation improves to a point where you can manage your debts independently. Once under debt review, your credit profile will reflect this status, and you’ll be unable to access new credit until the process is completed. Removing this status from your credit profile is crucial if you want to restore your creditworthiness.
The National Credit Act (NCA) governs debt review in South Africa, ensuring that consumers are protected from over-indebtedness. While the system provides a lifeline to those drowning in debt, it can also limit future financial opportunities if you wish to take out new loans, finance a car, or apply for a mortgage. Once you have successfully completed the process of debt review, having it removed from your credit record can open doors to new financial possibilities.
The Debt Review Removal Process
Debt review removal is not automatic. Even after settling your debts, your credit profile will still reflect your debt review status until you actively initiate the removal process. Here are the general steps involved:
- Ensure Your Debts are Settled: The first step to debt review removal is to ensure that all your debts, as outlined by the court order under the debt review process, have been fully paid. This includes accounts with every creditor included in the agreement.
- Obtain a Clearance Certificate: Once you have settled your debts, your debt counsellor is required to issue a clearance certificate, known as a Form 19. This certificate serves as proof that all your debt obligations have been met according to the restructured payment plan. Without this certificate, debt review removal cannot proceed.
- Notify the Credit Bureaus: After receiving your clearance certificate, your debt counsellor will contact the credit bureaus to update your credit profile and remove the debt review status. This is a crucial step, as it ensures that potential lenders no longer see you as under debt review, thereby restoring your credit profile.
- Follow Up on Your Credit Report: While the credit bureaus are obligated to update your profile within 21 business days, it’s advisable to request a copy of your credit report to confirm that the changes have been made. If your credit report still reflects the debt review status, you can contact your debt counsellor to resolve the issue.
Why Debt Review Removal is Important
Having the debt review status on your credit profile can restrict you from accessing credit, even if you are now in a financially stable position. Whether you want to purchase a home, finance a vehicle, or even open a new line of credit, lenders may be reluctant to offer you financing as long as your profile shows that you were under debt review.
Debt review removal not only restores your ability to apply for credit but also demonstrates that you have taken responsibility for your financial situation and have successfully overcome your debt challenges. This can be a huge confidence booster, paving the way for better financial opportunities in the future.
How NDCSA Can Help
Navigating the debt review removal process can be daunting, particularly if you are unsure about how to approach it. This is where NDCSA’s debt review removal services come into play. With decades of collective experience in debt counselling and credit restoration, NDCSA helps individuals across South Africa successfully exit the debt review process and regain control of their financial futures.
Our experts understand the importance of restoring your credit profile and work closely with you to ensure the process is smooth and hassle-free. Whether you need assistance obtaining your clearance certificate or navigating communication with the credit bureaus, NDCSA is committed to helping you restore your financial standing as quickly as possible.
Debt review removal is a critical step toward regaining financial independence and restoring your creditworthiness. While the debt review process provides valuable protection during times of financial difficulty, it’s essential to ensure that once your debts are settled, you take the necessary steps to have this status removed from your credit profile.
At NDCSA, we specialise in guiding individuals through the debt review removal process, making it easy for you to transition back to financial freedom. If you’re ready to take the next step in your financial journey, contact NDCSA today to learn more about how we can help you restore your credit profile and start anew.