MONEY CLINIC | Debt review: Can I go to court to have my debt written off?

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To address historical debt, there are a few options available for consumers.
To address historical debt, there are a few options available for consumers.
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A Fin24 reader currently under debt review can no longer afford to repay her debt repayment. She looks to an expert on whether she should approach the court to write off her debt. She writes: 

I am under debt review and have been since 2012. My husband recently passed away. I have no assets and will have to move in with my son. 

I was recently retrenched and did not pay towards a pension/provident fund. I now only receive a Sassa pension of R1 850 per month. I am 61 years old. The current balance with my debt review agent is R68 000. Can I approach the courts to have this amount written off or reduced? My debt review agents have advised that this could be costly - money I do not have.

Renee Marais, registered and independent debt counsellor in Pretoria, responds:

Without access to the debt review order and the repayments you made since 2012, I can't give you specific advice. Each consumer's circumstances are unique, and there is no one-size-fits-all solution. I will, however, attempt to answer in general.

Debt review begins with a court order that rearranges/restructures the debt you are contracted to by reducing the instalment and extending the term of the payments. The only way to exit debt review is to pay off all the debt and receive a clearance certificate. A high court directive was handed down in September 2019 explaining what the National Credit Act prescribes regarding the exit of debt review and remedies therein.

A debt review order can only be taken on review or appeal if there is something materially or procedurally wrong with the order and the rules of the different courts are strict. A magistrate's court cannot amend or rescind a debt review order after the prescribed period of time.

This matter consequently needs to be referred to a high court with a condonation for why the rescission or amendment or substitution application is brought more than 10 years after the court order in the magistrate's court. It can be done, but it is risky and expensive litigation.

Unfortunately, a court cannot find that your debt must be written off. Also, a state pension received by the government cannot be utilised for debt repayments.

READ | Social grant recipients preyed on by lenders, report finds

After retrenchment, there is usually a payout that could have been utilised to reach early settlement agreements with the credit providers or if you had credit life protection on the credit agreements have that claimed to settle your debt.

The debt counsellor is not in a position to assist you with any assistance after the debt review order was granted, except for the clearance certificate. Debt counsellors do not work for credit providers, credit bureaux or debt collectors as the National Credit Act prohibits that. The debt counsellor can also not assist you with anything relating to insurance except if the debt counsellor is a registered Financial Service Provider, which is also against the law.

Here is a link to a Fin24 comment about debt review with more information: Analysis: All you need to know about debt review or Facebook Page DEBT REVIEW CONSUMER QUESTIONS or DEBT REVIEW COMPLAINTS. There is a lot of information available for free to consumers. 

My advice is to contact the executor of your husband's estate or contact a lawyer to assist. Legal Aid, one of the University's Legal clinics, may perhaps provide you with assistance. Alternatively, try Legal Aid SA.

Legal Aid contact details

  • Phone 1: 011 877 2000 (National office reception)
  • Phone 2: 0800 110 110 (Toll-free Legal Aid Advice line)
  • Phone 3: 0800 153 728 (Legal Aid Ethics hotline)
  • Phone 4: 079 835 7179 (Please-call-me number)
  • Email: communications2@legal-aid.co.za.
  • Facebook: @LegalAidSA1.

*Disclaimer: I am not a lawyer, and my opinion is not legal advice and should not be construed as such.

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