Leaving Debt Review, an Easy (ish) Guide.

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H8rlequin

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Good Day All!!

First post, but I did feel it is pertinent that someone makes mention of it and I am sure there are many people under debt review who are in the same position as me, so here goes!

Way back in 2012 I had the misfortune of being retrenched and being without a means of income for around 7 months. When I did eventually find my way back onto my feet, I found myself earning a whopping R10 00 less than I had been earning, without any opportunity to get back where I was in terms of remuneration. Soon my debt commitments caught up with me and being nearly 7 months behind the only viable option seemed to be debt review/administration (not sure if they are in fact the same thing, but I am sure a forum member will correct me shortly). Fast forward to 2016 and I am earning roughly double what I had been earning before I lost my job and life is good... except for one thing. I am still under debt review.

Not being able to make any debt for +- 4 years is quite an experience and you really do learn to use your money better (or at least I did). Some things however are very difficult to do without access to credit... like buying a car, or a house, both if which I find myself now in need of. And so the process of finding a way out of debt review began.

(Disclaimer: There is very little information on the internet about this, and I can only comment on my own experience)

My experience is limited strictly to removing debt review on the basis of declaring that I am no longer over-indebted! This is not a easy process, and it takes a couple of months it must also be noted!

FOR YOUR INFORMATION: It is important to note that the debt counselor does not have the statutory powers to terminate or withdraw the debt review process! This basically means that you can ask your debt counselor really nicely for as long as you like but they are still not able to remove you from debt review! Only the courts have this power!

You can only withdraw from debt review if, A: You cancel your application before they issue a 17.2 form (this normally happens right at the beginning so chances are good they issued it a long time ago). B: You did not pay and the debt counselor cancels their service to you. *IMPORTANT* This does NOT stop debt review, the debt review flag WILL remain on your name and you will have to keep making payments to your creditors. It just basically means the debt counselor is not doing it FOR you anymore. C: You have obtained a court order to rescind your debt review. D: You obtain a court order to declare you are no longer over indebted.

Ok.. so Points C and D are most likely what you will be doing... and they are confusing as hell when reading the official guidelines, but essentially it's like this:

A: Your debt counselor applied and obtained a court order when you initially signed on for the review. In this case your court order needs to be rescinded (Point C above)
B: Your counselor never obtained a court order (could be for a number of reasons). (Point D above)

So there is a some uncertainty here.. there are a whole bunch of websites and "lawyers" who claim they can remove your debt review flag "instantly" or "within 1-5 days" provided there is no court order (which in my case there wasn't) This is BS, please do not sign on to any R100 pm for 12 month deals to get it clear, it's a rip-off and does not work!

The ONLY way the flag can be removed from your name is if you/your lawyer declares that you are no longer over indebted with the courts!

The official guidelines also say you have to obtain a 17.W form from your counselor... DON'T BOTHER! Leave this to your lawyers!

Ok, so let's get to the practical bits

Step 1: Phone your debt counselor and inquire if there was a ever a court order issued. (The lawyers will need to know this)
Step 2: Get a descent lawyer! Ok... so now you are running for the hills and dollar signs are flashing in your eyes right??? Don't stress!!! There are people like http://www.legalrights.co.za/ who offer their debt rescission services for a fair price and installment options (R9900 payable over 6 months at the time of writing).
Step 3: They do almost everything, but you will need to work out how much you can afford to each creditor per month. Best is to phone your creditors, ask for the outstanding balances and check how much your debt review is currently paying them... your payments will have to higher, remember.
Step 4: Provide all the relevant details, payslips etc and wait. The process can take up to 3 or 4 months depending on court dates!
Step 5: As soon as the lawyers have done the declaration/rescission the debt counselor has 5 days to notify all the credit bureau's which will remove the debt review flag from your name.
Step 6: Phone your creditors and make payment arrangements immediately!

Remember, once you have done the above, you cannot go back under debt review, so be sure to make the arrangements quickly and make sure you stick to them!

And that's it... 6 Steps, 3-4 month's and +- R10K to be removed from debt review. Some debt counselors may also charge a type of penalty fee for this so it's best to ask about that before starting the process.

Will be happy to explain anything if I have the answers!
Best Of Luck!!!
 
Last edited:
I'm not sure if this is an advert for legalrights.co.za or whether it is advice.

Step 3 & 6 doesn't make sense. You should have paid up all your creditors before starting at Step 1.
 
marco79 said:
I'm not sure if this is an advert for legalrights.co.za or whether it is advice.

Step 3 & 6 doesn't make sense. You should have paid up all your creditors before starting at Step 1.
Click to expand...

Not really, leaving debt review would mean you would revert back to paying your full monthly installment as opposed to the reduced rates you are on when under debt review. AFAIK.
 
Hey Marco!

Definitely not an advert! I am simply pointing them out as it was VERY hard for me to find lawyers that specialize in this type of thing! My normal lawyer wanted much more money for this and did not really know how to help me. Plus, the option to pay off over a couple of months means you don't have to have a small fortune on hand to get it done! Any lawyer can do it though... so use it or not :)

With regards to step 6, creditors do not want to and in most cases flat out refuse to start negotiations while you are under debt review. It's certainly possible to increase your payments through your PDA, but virtually all the creditors will only make payment arrangements when you are not under debt review.
 
Also have to mention, by doing this you DO NOT have to have paid up all your creditors. You can do this any time during your debt review process.
 
Got to love the financial system that Costs you money to help you get out of debt....
 
So you're saying one could get out of debt review without all your debts being settled?
 
I've always advocated Debt Review/Counseling as a last resort due to the cost of Debt Review and the difficulty in leaving debt review. (This is provided you will have the discipline to stick to any arrangements. Often those who are over-indebted have personality/psychological issues which resulted in their current situation and a debt counselor can help in this regrard)

You can make similar (if not better) payment arrangements with your creditors by yourself generally without having to pay the DC fees or pay for the lawyers when you want to leave DC.

@OP Thank you for this post, it provides useful insight into the DC process and termination of the DC agreement. Also, many who have applied for DC struggle to get out of it even once things are back to "normal".
 
That's correct. It's shocking how little information is out there about this, and in fact the ability to leave debt review is relatively new. Thinking about people who owe a couple of million on their homes etc...

You can effectively leave debt review a month after you started it if you want. Just very costly.
 
Thanks for the kind words.

Yup, it really is a last resort. I am a big advocate of taking this step if you have no where else to turn, like in my case, but it is expensive and takes a very long time if not managed correctly.
 
Hey All!

Just flogging a dead horse here :)

Just as a FYI, my official court date is in 2 days, and I will provide an update again as to how long it actually takes the credit bureau's to remove the debt review flag from your name.

Will keep this thread posted.
 
At OP, how far did you get?

I just had a family member ask me to do research wrt leaving the debt review process. She has made 3 payments to the debt counselors, and about less than a 3rd of what she paid them, has been paid onto her accounts. She now feels it would be better to pay her accounts herself.
 
Hi!

Sorry for my late reply, busy time of the year.

So, the process is still on going. The case was seen on the 10th, and the court order was granted. However, it takes up to 10 working days for the court order to actually be issued. (Just a note here, the court order is actually granted by the high court as it's the only court that has the jurisdiction to overrule the magistrate court's initial ruling)

I received my court order after 6 working days. The court order has been sent to my debt counselor and they need to issue a 17.W form (can take up to 20 working days). After I have received it, disputes need to be logged with all credit providers to remove the debt review flag from my name (can take up to 20 working days as well).

So, all in all I am expecting it to only be off my name completely next year.

This is a long ass process and very frustrating as well.
 
Hi!

To reply to your comment specifically. If she is only 3 months in it's hard to get it overturned as the counselor will more than likely have a clause that incurs penalties for early cancellation. Also, as mentioned it's expensive and lengthy to try and leave now.

That being said! She CAN stop payment to her PDA (payment distribution agent, IE the debt counselor) and make payments to the banks directly. By doing this she will remain under debt review, but the counselor is out of the picture. Just note however, when doing this the banks will almost certainly give you flack and tell you they want to speak to the counselor... It's not legal for them to deny you to make payment however and she will have to be persistent with them. I am not sure how this will work however in terms of getting the flag removed from her name once the debts are paid up.

My best advise is to have a chat to her counselor and ask them to explain why so little is actually reaching the creditors. Also, if the counselor is ripping her off, it might be worth while to speak to another counselor and find out if she can be moved over to them instead.

Hope that helps!
 
marco79 said:
At OP, how far did you get?

I just had a family member ask me to do research wrt leaving the debt review process. She has made 3 payments to the debt counselors, and about less than a 3rd of what she paid them, has been paid onto her accounts. She now feels it would be better to pay her accounts herself.
Click to expand...

Just remember that the 1st few months the monies go to the lawyers for fees to cover the court order etc.
 
So, after a long 5 months the debt review flag has finally been removed from my name!!!

If I did not push everyone on their deadlines it might have taken 8 months and I believe it's good advice for the consumers to keep following up with their counselors... mine's service was shockingly bad.

I hope this guide helps and provides a real world overview of what to expect.
Best of luck to all.
 
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