According to Nqobile Shabane (CA SA), the process and cost of exiting debt review depend on the stage of the debt review process. Here’s a breakdown based on her insights:
1. Exiting Before the Court Order is Issued
If the court order confirming your debt review has not yet been issued, you can exit the process by providing evidence that your financial situation has improved.
- Requirements:
- Submit supporting documentation to your debt counsellor showing that you are no longer over-indebted (e.g., payslips, bank statements, or proof of additional income).
- The debt counsellor will forward your case to the court for assessment.
- Cost Figures:
- Debt Counsellor’s Fees: You will still need to pay for their services, which can range between R5,000 and R8,000, depending on the counsellor and your case.
- Court Application Fee: The cost of submitting your case to the court can be R2,000 to R5,000.
If the court rules that you are no longer over-indebted, the debt review status will be removed. However, you must still settle any remaining fees with the debt counsellor.
2. Exiting After the Court Order is Issued
If the court has already issued an order confirming your debt review status, the only way to exit is to pay off your debts in full, except for a home loan (if applicable).
- Steps to Exit:
- Accelerate Payments: Increase your monthly payments or make lump sum payments to clear your debts faster.
- Obtain Clearance Certificates: After paying off all debts (excluding a home loan), request settlement letters from creditors and a clearance certificate from your debt counsellor.
- Credit Bureau Update: Your debt counsellor will send the clearance certificate to the credit bureau to remove the debt review status.
- Cost Figures:
- Debt Counsellor’s Final Fees: Once you’ve paid off your debts, you must still pay the debt counsellor’s exit fee, which can be up to R1,000 to R2,000.
- Settlement Letter Administration Fees: Some creditors may charge small fees to issue settlement letters. These can range from R200 to R500 per creditor.
Exceptions for Home Loans
If you have a home loan, it can remain under the debt review status even after your other debts are settled. However, your credit record will reflect that the debt review status is no longer active.
Is Removing Debt Review Free?
No, removing debt review is not free. You will incur costs such as debt counsellor fees, court application fees, and possibly settlement letter fees. Moreover, repaying your debts in full (if a court order exists) is the primary financial requirement.
Nqobile’s Final Advice
Nqobile warns against companies claiming they can “fast-track” your exit from debt review. These companies still rely on the same processes outlined above. She emphasises:
- You cannot quit debt review at will.
- Evidence of improved finances or debt repayment is mandatory.
If you want to learn more about debt review and how to manage your finances, visit Nqobile Shabane’s platform, Nuggets for Your Wallet, for further guidance.
This version highlights specific figures where applicable and strictly uses Nqobile’s insights. Let me know if you need further adjustments!