Can you cancel debt review?

Lucky asks: I would like to know if it is possible to deregister from debt-review?

I would like to make payment arrangements with the debtors as I’m now financially stable. I’ve been promoted and I don’t think debt-review is necessary anymore.

Are there any penalties I must expect from the debt counsellor if I need to deregister, even though I make regular payments?

My original balance of all my debts was around R15 000. In 2009 I applied for debt review and I signed to pay R1 000 monthly. Suddenly my new balance is R75 890.

Maya replies: Paul Slot of debt counselling company Octogen says that in terms of the National Credit Act, a consumer can only “withdraw” from the debt review if all the debt has been repaid.

When this happens the debt counsellor will issue a clearance certificate.

However this is not practical in all circumstances. So consumers are allowed to “withdraw” from the debt review if no court order has been obtained. So it is important to find out if a court order was obtained by the debt counsellor when you first went into debt review.

In other words, did your creditors require a court order or did they agree to debt review in the first place?

When you withdraw, the debt counsellor is obliged to notify all credit providers — and provided a 60 day period has elapsed since the application and the matter in no longer in front of a court — then the credit provider could proceed with legal enforcement.

If all payments are fully up to date however (all arrears payments have been paid) then the credit provider cannot or is unlikely to proceed with any legal action. If payments are not up to date then you run the risk of legal action by credit providers.

If a court order is in place for the debt review and payments are made in terms of the court order, then you can only “leave” the debt review if the court order is set aside. The exception is if the debt is repaid in full. Under these circumstances it is not advisable to withdraw from debt review.

Nothing is however stopping you from repaying more than required — this will result in a faster repayment.

In terms of the costs you mention, Slot says you should verify that the credit provider has loaded the terms and conditions as per the court order on their system. Very often this is not the case and additional cost and charges are loaded. This is not allowed.

You definitely need to find out what additional costs have been incurred and whether these are legal. Your debt counsellor should be fully aware of these.

In terms of Section 103(5) of the NCA, the total debt repayments (including cost, fees and interest), from point of default, cannot exceed double the amount outstanding. This is applicable on debt entered info after June 2007.

Read more news, blogs, tips and Q&As in our Smart Money section. Post questions on the site for independent and researched information

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Maya Fisher French
Guest Author

Safety at schools: ‘Keep your distance and your pen’

The department of basic education has developed guidelines to assist schools with minimising the spread of the coronavirus

‘Soon he’ll be seen as threatening, not cute’: What it’s...

There is no separating George Floyd’s killing from the struggles black people have faced ever since the first slave ships landed on these shores

How schools could work during Covid

Ahead of their opening, the basic education department has given schools three models to consider to ensure physical distancing

Press Releases

Covid-19 and Back to School Webinar

If our educators can take care of themselves, they can take care of the children they teach

5G technology is the future

Besides a healthcare problem Covid-19 is also a data issue and 5G technology, with its lightning speed, can help to curb its spread

JTI off to court for tobacco ban: Government not listening to industry or consumers

The tobacco ban places 109 000 jobs and 179 000 wholesalers and retailers at risk — including the livelihood of emerging farmers

Holistic Financial Planning for Professionals Webinar

Our lives are constantly in flux, so it makes sense that your financial planning must be reviewed frequently — preferably on an annual basis

Undeterred by Covid-19 pandemic, China and Africa hold hands, building a community of a shared future for mankind

It is clear that building a community with a shared future for all mankind has become a more pressing task than ever before

Wills, Estate Administration and Succession Planning Webinar

Capital Legacy has had no slowdown in lockdown regarding turnaround with clients, in storing or retrieving wills and in answering their questions

Call for Expression of Interest: Training supply and needs assessment to support the energy transition in South Africa

GIZ invites eligible and professional companies with local presence in South Africa to participate in this tender to support the energy transition

Obituary: Mohammed Tikly

His legacy will live on in the vision he shared for a brighter more socially just future, in which racism and discrimination are things of the past

The best local and international journalism

handpicked and in your inbox every weekday