What is a debt review clearance certificate?

A debt review clearance certificate is a certificate that verifies that a consumer has satisfied all obligations under every credit agreement that was subject to a debt review court order or debt review repayment agreement. Debt Review Clearance Certificate, also known as a Clearance Certificate or Form 19, is a legal document issued by a debt counsellor.

What does a clearance certificate signify?

1. Completion of Payments: It confirms that the consumer has satisfied all the repayment obligations under the restructured payment plan formed during the debt review process. The issuing of a clearance certificate signals the end of a successful debt review process. The effect is that even if the consumer has a long-term agreement that was subject to debt review such as a mortgage bond, they can obtain a clearance certificate after every other short-term credit agreement under debt review is paid in full. In terms of the National Credit Act (NCA) 34 of 2005, the debt counsellor and not the courts, must issue a clearance certificate.

2. Restoration of Creditworthiness: The issuance of the certificate essentially means the consumer is no longer under debt review, and their creditworthiness is restored. The individual can regain access to credit facilities as their credit profile is no longer flagged under debt review. The successful completion of the debt review may positively influence the individual's credit score over time.

3. Communication with the Credit Bureaus: Upon issuance, the debt counsellor communicates with credit bureaus, and the information concerning the consumer's debt review status is updated. This removal process helps improve the consumer’s credit record. ​​​​​

elements of the clearance Certificate

• Consumer Details: Such as name, ID number.
• Debt Counsellor Details: Including name, registration number, and contact information.
• Credit Provider Details: Information about the creditors involved in the debt review.
• Statement of Completion: Confirmation that the consumer has fulfilled the debt repayment as per the restructured plan.

Under what conditions can a debt review clearance certificate be issued?

A consumer under debt review can only be issued with a clearance certificate when:

• When they either have paid up all their debts which were listed in the debt review court order or the debt review repayment agreement
• When all their short-term credit agreements listed in the debt review court order or debt review repayment agreement which short-term agreements may include a vehicle financing agreement have been paid in full and the consumer is only left with a mortgage loan that is not in arrears in terms of the debt review court order or debt review repayment agreement.

Credit providers must issue paid-up letters on the short-term agreements before the issuing of a clearance certificate by the debt counsellor to ensure that the debt has been repaid in full. Once the clearance certificate is issued this must be forwarded to all the credit bureaus together with the paid-up letters. The debt counsellor and credit bureaus have to update their systems to show that the consumer has completed the debt review process.

It’s crucial to maintain communication with the debt counsellor and credit bureaus to ensure that your credit profile is accurately updated after receiving the clearance certificate. Having l financial advice during this phase can also be beneficial to navigate any complexities or issues that may arise during the transition out of debt review. Contact Debt Sage, the debt counselling experts today. We can help to issue a clearance certificate if all your accounts under debt review have been paid up so that you can enter into new credit agreements.