MONEY CLINIC | Can I be removed from debt review with only one account left to pay?

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A Fin24 reader was recently approached by a company with a promise to be removed from debt review. Seeking the help of an expert she writes:

I would like to know whether it is possible for one to be removed from debt review even when all debts are not fully paid.  

I have recently come across a company that said they will talk to my debt counsellors and have me removed from debt review even though I still have one more account to pay. Is this possible? 

Sebastien Alexanderson, CEO of National Debt Advisors, responds:

'Can I leave debt review early?' is the most frequently asked question in our industry.

The simple answer would be the following. Yes, if only a 17.1 form has been issued. Maybe, if a 17.2 form has been issued, but you don’t yet have court order and your financial situation has changed. No, if you have a granted court order.

It seems that you have had a 17.2 form issued and have a repayment plan in place. If you have been making your reduced payments and your financial situation has become better - but a magistrate has not issued a court order - then you put in this information in your application to be brought before court. If the magistrate finds that you are no longer over-indebted, he may terminate the debt review.

If, however, a court order placing you under debt review has been issued, then you cannot leave the debt review process until you have paid up all your debts as per your repayment plan and the court order (this excludes your home loan).

This also means that even if your financial situation has changed, you cannot leave your debt review process.

The only way to get out of debt review (according to the scenario that you have given) is to take the money that you paid towards all your other debt on a monthly basis , and put that towards this last account and get it done as soon as possible.

Speak to your debt counsellor about what stage in the debt review process you are in - and discuss your options based on that. Be very careful of unscrupulous individuals and companies who promise to be able to remove you from debt review (for a fee, of course) and then can’t.

So in conclusion - there is no easy way out of debt review. Once you start the process, you need to remain committed and see it through until the end, until all your debt is paid.  

In September 2019, a full bench of the Gauteng High Court confirmed that not even they had the power to release you early from debt review merely because you are no longer over-indebted, or your circumstances have changed.

There is however nothing preventing you from from paying more money to your creditors and clearing your debt sooner. 

Stay the course. There is nothing better than when you receive your clearance certificate from your debt counsellor and you finally financially free!

Compiled by Allison Jeftha. 

  • Questions may be edited for brevity and clarity.

Have a money problem that needs solving? Fin24 can help! Send your question to editor@fin24.comDisclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner. 

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