Debt review, also known as debt counselling, is a process initiated in South Africa with the introduction of the National Credit Act (NCA) in 2007. It’s designed to assist consumers who are struggling with unmanageable debt, offering a structured means of addressing and reducing significant financial distress.
Getting Your Clearance Certificate
After successfully completing the debt review process in South Africa, you will receive a Clearance Certificate (Form 19) from your debt counsellor. You will receive a Clearance Certificate when you’ve repaid all debts listed under your reduced debt review repayment plan in full. A debt counsellor will review and confirm that you meet the necessary requirements for the issuance of the Clearance Certificate.
This certificate is proof that you have satisfied your debt obligations as per the restructured payment plan devised during the debt review process. The exact time it will take for you to receive your clearance certificate can vary, but it often takes a few days to a few weeks.
Credit bureaus might take additional time to update your credit profile. This duration can vary from a few days to several weeks. If your credit report isn’t updated after a reasonable time, engage with both your debt counsellor and the credit bureaus to correct the discrepancies.
Receiving a Clearance Certificate is a significant milestone on your journey to financial freedom, signifying the end of the debt review process. This means the flag will be removed and you can start rebuilding your credit profile again.
Steps After Debt Review
- Credit Profile Update: Upon receiving the Clearance Certificate, the credit bureaus should be notified, and they will update your credit profile to reflect that you are no longer under debt review.
- Credit Score Recovery: Over time, as you practice responsible financial behaviours, your credit score will begin to recover.
- Rebuilding Creditworthiness: Initially, you might find it challenging to obtain new credit, as lenders might still view you as a risk. Consistently demonstrating financial responsibility will help rebuild your creditworthiness over time.
Applying for Credit
- Gradual Process: After completing debt review, it is advisable to approach credit cautiously and responsibly. Rushing into taking on new debts can lead you back into financial distress.
- Credit Cards & Small Loans: You might want to start with a small, manageable form of credit, like a credit card with a low limit or a small personal loan, to gradually rebuild your credit history.
- Financial Discipline: Practice financial discipline, ensure timely repayments, and avoid falling into the debt trap again.
Contact Debt Rescue if you would like to talk to an expert debt counsellor for a free assessment for a reduced single debt repayment.