What is debt review removal? This guide explains the process of removing the debt review flag from your credit report, helping you regain access to loans and rebuild your creditworthiness. Includes a real-life example!
By The National Debt Review Center
Introduction
Debt review, a process where a professional helps individuals manage overwhelming debt, can be a lifeline for those struggling financially. However, once you’ve successfully navigated your repayment plan and are back on track, the mark of debt review on your credit profile can linger, potentially hindering your ability to access new credit. This is where debt review removal comes in.
Simply put, debt review removal is the legal process of having the “debt review” flag removed from your credit report. This flag, a consequence of seeking professional help from a registered debt counsellor, can be seen as a red flag by lenders, making it difficult to secure loans, vehicle finance, or even cell phone contracts.
Debt Review Removal real life examples.
Sarah, a diligent accountant, always managed her finances responsibly. However, she received a notification that she was under debt review, a status she never agreed to. Upon investigation, she discovered a “rogue” debt counsellor had falsely registered her without consent. This not only caused immense stress but also negatively impacted her credit score, making it difficult to secure a mortgage for her dream home.
Imagine Amanda, a young professional, who utilised debt review to manage her loans and credit card debt responsibly. She successfully applied for the debt review program and is now financially stable, but the remaining debt review flag on her credit report is preventing her from securing a car loan to pursue a career opportunity across town.
This highlights the importance of debt review removal in regaining access to the credit market and opportunities that the flag might hinder.
The Removal Process:
The process for debt review removal can be complex and varies depending on your specific situation. Generally, it involves:
The first step is to complete the application for debt review removal form. The client initiates the process by either booking an appointment or completing an online application form. The application form can either be filled out online or downloaded and submitted after completion.
The second step is to assess your application. After receiving the application, it is thoroughly assessed to determine the likelihood of a successful debt review removal. This involves reviewing your current financial status, ability to service your current debt obligations, debt review history and other contributing factors.
Once the application is deemed potentially successful, a legal pack is prepared. This involves gathering all necessary documentation from relevant stakeholders, which may include previous debt counsellors, credit providers, client and other legal entities.
The complete application/legal pack, is then submitted to a court. The purpose is to obtain a court order declaring that you are no longer over-indebted.
If the court finds the application valid and it meets all criteria, the order declaring you no longer over-indebted or rejection thereof of the previous application will be granted.
Once the court order is granted, the documentation is submitted to the NCR for updates and verification.
After the NCR updates their records to reflect your new status, they notify all credit bureaus of the change and request us to do the same.
Your record from the bureaus will be updated within 21 business days after our submissions and the debt review listing will be successfully removed from your credit profile, thus restoring your creditworthiness.
Remember:
Seeking professional help with managing debt is a responsible step, and it shouldn’t negatively impact your future financial endeavors.
Debt review removal can be a complex process, so consulting with a registered debt counsellor or contacting the National Credit Regulator can be beneficial.
By understanding debt review removal and taking necessary steps, individuals like Sarah & Amanda can move beyond the challenges and rebuild their creditworthiness, opening doors to new financial opportunities.
Book a Free Debt Review Removal Consultation with The National Debt Review Center Below.
To terminate the debt review process and to have the debt review notice removed from your credit reports requires that a court application be made for the court to find that you are not over-indebted, even if there is no court order in place for your debt review.
Once creditors and the credit bureaus receive the certificate from the Debt Counsellor, they will remove the debt review flag from the client's name. The default listings and judgements will be removed from the client's name.Only your payment history will remain.
Debt review itself may be a well-established practice but removing yourself from the process is a different story. It's not as simple as ditching your financial assistance or unsubscribing from a service. It's a complicated legal process. With that said, a point to focus on is that it is a legal process.
Importantly, there are legal requirements in place to ensure the prompt removal of the debt review flag. Credit bureaus are obligated by law to remove the flag within 21 days of receiving the clearance certificate.
During Debt Review, you cannot access new loans or credit cards. While this helps break the borrowing cycle, it can restrict your financial flexibility. This is a big ask for most people. And understandably so, stepping away from the dependency on credit is a big hurdle.
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.
As stated by the National Credit Act (NCA), should a bank or creditor approve a loan application from a debt review candidate, they are guilty of reckless lending. The NCA states no one under debt review is eligible for further loans until they have completed the debt review process and are no longer over-indebted.
A debt review flag is a warning or notice that is put on your credit report when you are undergoing the debt review (debt counselling) process. This is so that creditors know not to give you any credit (loans) during this time. The reason for this is that debt review is a way of rehabilitating your finances.
No, debt review won't hurt your credit. In fact, quite the opposite! During debt review, the credit bureaus can't list any further negative information under your credit profile.
If a determination of over indebtedness is made, but the restructured payment plan has not been made an order of Court, the consumer will remain under debt review. In such cases, the consumer would have to approach the relevant Magistrate's Court for an order to declare it no longer over indebted.
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 debt counselling or debt review process typically takes between 36 to 60 months (3 to 5 years) to complete. This duration can vary based on several factors, including the total amount of debt, the interest rates negotiated, the monthly payment capacity, and the individual's commitment to the repayment plan.
You can get a credit report at any of the credit bureaus, including Experian, TransUnion, etc. This can be done for free every year. If the bureaus have not removed the 'under debt review' flag from your profile, it will be shown on the front page of your report.
Generally speaking, try to minimize or avoid debt that is high cost and isn't tax-deductible, such as credit cards and some auto loans. High interest rates will cost you over time.
How to Remove Canceled Debt From Your Credit Report. In general, you can't get discharged debt removed from your credit report unless the information is inaccurate. In that case, you have the right to file a dispute with the credit reporting agencies.
Introduction: My name is Jeremiah Abshire, I am a outstanding, kind, clever, hilarious, curious, hilarious, outstanding person who loves writing and wants to share my knowledge and understanding with you.
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