Page 99 - Q&A

How to get out from debt review if your
financial situation has changed

January 2020
“I was placed under debt review when I lost my job two years ago. I’m employed
again and can now pay my debts and even look at getting credit again,
but because I’m under debt review I cannot do so and my debt counsellor is
refusing to issue me a clearance certificate. What are my options here?”

The National Credit Act allows a debt counsellor to issue a clearance certificate
when a consumer has settled all obligations covered by the debt review, or
shows they are able to cover future liabilities, including mortgage or other
long-term obligations, provided other credit agreements have been settled in full.
This allows a consumer to exit from debt review once their shorter-term debts
have been settled, but without having to pay up long-term debt such as a
mortgage bond.

But, if a debt counsellor refuses to issue a clearance certificate? What then?
Our courts have had occasion to consider the situation of such a consumer
whose ability to settle their short-term debt obligations has improved but a
clearance certificate is being refused.
In short, it appears as if there are two avenues for a consumer to follow if a
debt counsellor refuses to issue a clearance certificate, the applicable avenue
being determined by the manner in which the consumer was placed under
debt review. What is clear is that a consumer cannot approach the High Court
to have him declared no longer over-indebted.

The first avenue is where a consumer applies for debt review and obtains an
order to this effect from the Magistrate’s Court. In such a case the appropriate
steps to be followed if the debt counsellor refuses to issue the clearance
certificate, is for the consumer to approach the National Consumer Tribunal
with the relevant facts, who can then instruct the debt counsellor to issue the
clearance certificate.

The second avenue is where a consumer was declared over indebted by the Litigation
debt counsellor but such was not made an order of the court. In this situation
the appropriate steps would be to place the additional information pertaining
to the consumer’s financial position before the Magistrate’s Court and the
Magistrate should then logically be able to find that the consumer is not
over-indebted.
Given that both avenues may involve some complication, it may be advisable to
approach an attorney to assist you with representations to your debt counsellor
and any further steps that may be needed should the debt counsellor continue
to refuse to issue the clearance certificate.

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