How to Cancel Debt Review: A Step-by-Step Guide for South Africans

By The National Debt Review Center

A Step-by-Step Guide to Canceling Debt Review in South Africa

You have decided to cancel your debt review process. This is an important decision that requires carefully following the correct steps to successfully exit debt review. While the process may seem daunting, this guide provides an easy-to-follow, step-by-step walkthrough to ensure you complete the necessary procedures properly.

With patience and persistence, you can successfully cancel debt review and regain control of your finances. This article outlines everything you need to know, from confirming your eligibility to cancel, formally applying for cancellation, dealing with credit bureaus, and more. Follow the instructions carefully and you will be able to exit debt review smoothly.

Reasons for Cancelling Debt Review

There are several reasons why one might want to cancel their debt review.

1. If your financial situation has improved significantly, you may no longer need the assistance of debt review.
2. Being under debt review limits your ability to access further credit. If you need to take on more credit for a significant reason, such as buying a house, you might consider cancelling your debt review.
3. You might find another debt solution that suits your circumstances better.
4. You have been incorrectly listed as under debt review.
5. You are already making direct payments to your creditors.
6. Your debt review has been terminated and cannot be reinstated.

How to Cancel Debt Review or Debt Counselling in South Africa?

1. The client initiates the process by either booking an appointment or completing an online application form. The application form can either be filled out online or downloaded and submitted after completion.
2. The second step is to assess your application. After receiving the application, it is thoroughly assessed to determine the likelihood of a successful debt review removal. This involves reviewing your current financial status, ability to service your current debt obligations, debt review history and other contributing factors.
3. Once the application is deemed potentially successful, a legal pack is prepared. This involves gathering all necessary documentation from relevant stakeholders, which may include previous debt counsellors, credit providers, client and other legal entities.
4. The complete application/legal pack, is then submitted to a court. The purpose is to obtain a court order declaring that you are no longer over-indebted.
5. If the court finds the application valid and it meets all criteria, the order declaring you no longer over-indebted or rejection thereof of the previous application will be granted.
6. Once the court order is granted, the documentation is submitted to the NCR for updates and verification.
7. After the NCR updates their records to reflect your new status, they notify all credit bureaus of the change and request us to do the same.
8. Your record from the bureaus will be updated within 21 business days after our submissions and the debt review listing will be successfully removed from your credit profile, thus restoring your creditworthiness.

What Happens After Cancelling Debt Review?

After cancelling debt review, several important things occur:

1. The original repayment amounts will be reinstated.
2. The original contractual interest rates become applicable again. This means that the interest rates specified in your initial credit agreements will be reinstated.
3. Any waived delinquent payment penalties may be levied against your current accounts. These penalties were previously waived during the debt review process, but after cancellation, they can come back into effect.
4. Credit providers may initiate legal action. Since you will no longer have the protection provided by debt review, creditors have the right to enforce credit agreements that were previously under review. They may demand settlement of any arrears that accumulated during the review period and revert to the original contractual repayment amounts.
5. Debt review can negatively affect your credit score. When you cancel the process, your credit score may not immediately improve. It will take time for your credit history to reflect the changes, and any previous defaults or late payments may still impact your creditworthiness.
6. Without the structured repayment plan provided by debt review, managing multiple creditors and payments can become challenging. You’ll need to handle negotiations and payment arrangements independently, which can be overwhelming.
7. Debt review provides relief by reducing financial stress. Cancelling it might reintroduce anxiety related to debt management and creditor pressure. It’s essential to be mentally prepared for this shift.

Is Cancelling Debt Review a Good Idea?

Cancelling a debt review can have both advantages and disadvantages, and whether it’s a good option depends on your specific circumstances.

Advantages of cancelling debt review or debt counselling.

1. If you’re able to show that you can afford to increase the debt review repayment amounts, preferably to the amounts that you were paying before commencing with the review, you might be able to cancel your debt review.
2. Once the debt review is cancelled, you can continue to pay directly the reduced installment to your creditors if they have indicated acceptance of such reduced payments.
3. This therefore means you will be able to return to the credit market and apply for credit if you can afford and your credit score meets the lending criteria.

Disadvantages of cancelling debt review or debt counselling.

1. Once the debt review is terminated, creditors have the right to take legal action to enforce a credit agreement that was previously subject to debt review.
2. The original repayment amounts, and interest rates will be reinstated.
3. Credit providers have the right to initiate legal proceedings.
4. Managing multiple creditors and payments without the structured repayment plan of debt review can be daunting. It requires independently handling negotiations and payment arrangements, which may become overwhelming.

Remember, cancelling a debt review typically requires professional assistance, especially if it involves legal proceedings or negotiations with creditors. It’s always a good idea to consult with a financial advisor or a debt counsellor before making such decisions. They can provide guidance based on your personal financial situation.

Conclusion

Cancelling a debt review is a significant decision that should not be taken lightly. It requires a clear understanding of your financial situation and careful consideration. Always consult with your debt counsellor and consider all your options before proceeding. Remember, the goal is to become debt-free and financially stable. Whether you achieve this through debt review or another means, the choice is yours.

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