Lawyers and debt review removal in South Africa (2024)

FAQs

How much does it cost to remove a debt review in South Africa? ›

The cost of removing a person from the debt review system varies depending on the amount of outstanding debt and credit providers involved. Generally, it can take between R1 000 and R30 000 to remove someone from the system including fees for legal advice or guidance in negotiating settlements with creditors.

Once a debt review order has been obtained, a consumer cannot terminate or withdraw the debt review process, they can, however, approach the Court to rescind the order or apply for an order which declares that the consumer is no longer over-indebted.

The period during which your name is flagged as under debt review is directly tied to the length of your debt review process. Typically, this process can span anywhere from 36 to 60 months, depending on the amount of debt and the repayment plan agreed upon.

Yes, you can apply for a loan after a debt review. If you've been diligently sticking to your debt restructured payment plan, you may be really eager to take out a loan for a home or a car. The good news is you will be able to apply for credit after debt review.

Once you're officially under debt review, your credit profile is flagged at the credit bureaus in South Africa, and they are aware of the actions you are taking to repay your debt. This means you cannot take out any further debt until the debt review process is complete.

The number of years it takes for debt to become prescribed varies depending on the type of debt. For personal loans, credit cards, retail accounts, and vehicle loans, the timeframe is three years. Therefore, debt older than 5 years in South Africa is, most of the time, no longer collectable.

Can you leave South Africa while under debt counselling? Being under debt counselling doesn't hinder you from moving to a new country. You can still move to and work in another country while you're undergoing debt counselling. The only thing that is important is that you communicate this with your debt counsellor.

LegalWise provides Paralegal services relating to debt issues in our Branches, over the phone, via our new video consultation service, e-mail or WhatsApp.

Is debt collection legal in South Africa? ›

Debt collection is legal as a result of the Debt Collectors Act 114 of 1998 that led to the establishment of the Council.

It replaced the Usury Act and Credit Agreements Act, creating a more consumer-friendly credit market. Today, debt review stands as a vital tool in the South African financial landscape with over 3.5 million individuals having sought its assistance, finding relief from overwhelming debt burdens.

A prescribed debt is, to put it simply, an obligation that has essentially "expired." Usually, debt is said to have been prescribed when after three years have passed and the creditor or debt collector has not filed any legal action or requested payment of the outstanding balance.

If you have all your paid-up letters from creditors, it will cost you R1150 including VAT to be removed from debt review. If you don't have all your paid-up letters, we can still help you. It will just cost you more because we have to retrieve those paid-up letters.

You're required by law to repay the amount specified on the judgment or the credit lender can apply to repossess or auction your immovable assets. They can even repossess your movable assets to recover the funds.

Yes, this can be done if your debt review was made an order of court and the court order is subsequently rescinded OR an application is made to court to have you declared “not over-indebted.”

A fee for the drafting and submission of the proposed repayment plan (otherwise known as the “restructuring fee”) that is: Equal to the distributable amount (the sum total of what is paid to all of your creditors under the re-arrangement plan every month); or. Up to R8000, whichever amount is the lesser.

While debt settlement can potentially help you save a significant amount of money, the associated costs should not be overlooked. These fees will typically range from 15% to 25% of the total enrolled debt — but can also vary based on the company you choose to work with.

The simplest way to clear your name from the credit bureau is to pay off the debt. According to TransUnion, one of South Africa' biggest credit bureaus, this will usually result in your name being removed from the blacklist within 7 – 20 days.