REMOVAL FROM THE DEBT REVIEW PROCESS
Time and again, we receive queries and instructions from credit consumers who want to exit the Debt Review process. Of course, exceptions are due to personal circumstances, but in most cases, we have discovered two reasons why people want to exit debt review earlier than the due time:
First and most eminent, it comes as a rude awakening to most people soon after being under debt review that they can no longer access credit. In some instances, consumers are not made fully aware of the consequences of going under debt review.
Secondly, we have been instructed numerous times before that some Debt Counsellors explain only the form (as well as the benefits) and not the effects of Debt Review to consumers, thereby presenting it as Debt-Consolidation.
While Debt Review and Debt Consolidation may appear to have the same goal, they are fundamentally different. Debt consolidation is accessing a lump sum credit facility to settle all other accounts and only remaining with one significant monthly obligation towards that one lump-sum account, although it attracts certain disadvantages. On the other hand, Debt Review is a mechanism commenced by an application under section 86 of the National Credit Act 34 of 2005, after which:
- none of the consumer’s creditors may institute any legal proceedings in an attempt to absolve the debt owing to them by the consumer;
- the consumer’s access to further credit from a reputable and accredited credit provider is restricted; and
- debts restructured and monthly obligations catered for with the consumer’s income have consideration for the consumer’s essential living expenses or any residual or additional income.
As alluded to above, consumers have varying reasons why they would want to exit the Debt Review process earlier and wonder if this is possible. This will all depend on the stage reached and how far the process has gone. Here are the scenarios and options available.