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What is a debt review clearance certificate?

In this article, we explore a guide on the ins and outs of obtaining a debt review clearance certificate. We address the following questions:

  1. What is a debt review clearance certificate?
  2. What does a debt review clearance certificate signify?
  3. What is the debt review removal process?
  4. How much does it cost to be removed from debt review in South Africa?
  5. When can a consumer get a debt review clearance certificate?
  6. What is the NCR Debt Help?
  7. What are the elements of a debt review clearance certificate?
  8. Who informs the credit bureaus of your exit from debt review?
  9. How long does it take to remove the debt review flag with credit bureaus??

1. WHAT IS A debt review clearance certificate?

A debt review clearance certificate, or Form 19, is a legal document issued by a debt counsellor that verifies that a consumer has fulfilled all obligations under every credit agreement included in a debt review court order or a debt review repayment agreement.

2. WHAT DOES A DEBT REVIEW CLEARANCE  CERTIFICATE SIGNIFY?

  • ​​COMPLETION OF DEBT REVIEW

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

  • RESTORATION OF CREDITWORTHINESS

The completion of the debt review signifies that creditworthiness is restored. The individual can regain access to credit facilities as their credit profile is no longer flagged as under debt review. The successful completion of the debt review positively influences the credit score over time.

3. WHAT IS THE DEBT REVIEW REMOVAL PROCESS?

The debt review removal process is the steps the Debt Counsellor follows to remove the debt review flag on a consumer’s profile. To remove a person from debt review, the debt counsellor undertakes the following steps:

PULL UP YOUR CREDIT REPORT

We begin by retrieving your credit report to get a comprehensive view of your current credit status and obligations.

OBTAIN PAID-UP LETTERS FROM CREDIT PROVIDERS

We seek confirmation from your credit providers that your debts have been settled. This confirmation comes in the form of paid-up or prescribed letters. If you already have these letters, please forward them to us.

UPDATING THE NCR DEBTHELP SYSTEM

Update Your Status on NCR DHS to F2 Status: We then update your status on the National Credit Regulator (NCR) Debt Help System (DHS) to reflect an F2 status, which indicates that you have settled your debts.

GENERATION OF FORM 19

Next, we generate Form 19, a document required for the removal process that details the settlement of your debts.

FORWARD FORM 19 TO ALL CREDIT PROVIDERS

The debt counsellor sends Form 19 to all your credit providers to inform them of your updated status and the settlement of your debts.

CERTIFICATION OF FORM 19

Once Form 19 is completed and distributed, we ensure it is certified to confirm its authenticity.

SENDING COMMUNICATION TO CREDIT BUREAUS 

Finally, the debt counsellor sends the certified Form 19 and the paid-up letters to all relevant credit bureaus. This ensures that your credit records are updated to reflect the clearance of your debts.

These steps ensure that your debt review status is accurately removed and your credit profile is updated.

4. HOW MUCH DOES IT COST TO BE REMOVED FROM DEBT REVIEW IN SOUTH AFRICA?

The National Credit Regulator prescribes debt review fees. However, concerning debt review removal fees the NCR regulations are silent. That is why debt review clearance certificate fees vary from one debt counsellor to another. At Debt Sage, we are charging R1450 to issue a debt review clearance certificate.

5. WHEN CAN A CONSUMER GET A DEBT REVIEW CLEARANCE CERTIFICATE?

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

  • When they either have paid up all their debts  listed in the debt review court order or the debt review repayment agreement
  • When all their short-term credit agreements are listed in the debt review court order or debt review repayment agreement. Short-term credit agreements may include vehicle financing, credit card debt and personal loan agreements that have been paid in full. The consumer is only left with a mortgage loan not in arrears as per the debt review court order or debt review repayment agreement.

Credit providers must issue paid-up letters before issuing 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 with the paid-up letters. The debt counsellor and credit bureaus must update their systems to show that the consumer has completed the debt review process.

6. WHAT IS THE NCR DEBT HELP?

The NCR Debt Help System is a database listing all the people who have applied for debt review,  showing the status of their application. The NCR Debt Help is linked to the credit bureaus. The debt review clearance certificate signals the end of a successful debt review process. According to the  National Credit Act, a debt counsellor must issue the clearance certificate when the consumer has paid off all accounts under debt review. Only a registered debt counsellor can do this because they are authorised to access the  NCR Debt Help System.

7. WHAT ARE THE ELEMENTS OF A DEBT REVIEW CLEARANCE CERTIFICATE?

A clearance certificate has the following elements:

  1. Consumer Details
  • Name: The full legal name of the consumer.
  • ID Number: The identification number such as a national ID or passport number.

2. Debt Counsellor Details

  • Name: The full name of the debt counsellor responsible for managing the consumer’s debt review process.
  • Registration Number: The official registration number of the debt counsellor as recognized by the National Credit Regulator (NCR).
  • Contact Information: The debt counsellor’s contact details, including phone number, email address, and office address.

3. Credit Provider Details

  • Name of Credit Providers: All the creditors involved in the debt review process.
  • Account Information: Specific details of the accounts held with each credit provider, including account numbers and the type of debt.
  • Contact Information: Contact details for each credit provider, such as phone numbers and email addresses.

4. Statement of Completion

  • Confirmation of Fulfillment: A formal statement confirming that the consumer has met all the obligations under the restructured debt repayment plan.
  • Date of Completion: The date when the consumer completed the debt repayment.
  • Certification: An official certification by the debt counsellor that all conditions for the debt review clearance have been satisfied.

8. WHO INFORMS THE CREDIT BUREAUS when you EXIT DEBT REVIEW?

After issuing the debt review clearance certificate, the debt counsellor communicates with credit bureaus and creditors. Upon issuance:

  • Update Credit Bureaus: The debt counsellor notifies the credit bureaus, ensuring that the debt review status is updated in their records. This update is crucial for improving the credit profile. In South Africa, we have three  leading  credit bureaus namely:  

Transunionhttps://www.transunion.co.za

Experian -  https://www.experian.co.za

XDS -   https://www.xds.co.za

  • Notify Credit Providers: The debt counsellor also sends the debt review clearance certificate to the credit providers to inform them of the consumer’s cleared status.

These steps are essential in finalizing the removal of the debt review flag and enhancing the consumer’s credit record.

9. HOW LONG DOES IT TAKE TO REMOVE DEBT REVIEW FLAG with credit bureaus?

At Debt Sage, we assist consumers with removing their debt review status and clearing their names from debt review. You can approach Debt Sage for help with debt review removal, where we will issue you a clearance certificate and work to lift the debt review flag from your credit records. This process typically takes a maximum of 21 days.

Once your accounts are paid off and we have issued the clearance certificate, we send the certified Form 19 with paid-up letters to all relevant credit bureaus. The time it takes for the debt review flag to be lifted depends on how quickly the credit bureaus update their records, but it is generally completed within 21 days.

FINAL THOUGHTS

Maintaining communication with the debt counsellor and credit bureaus is crucial to ensure the 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 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.

 

 

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