MONEY CLINIC | Debt review: can I go to court to have my debt cancelled?

To deal with historic debt, there are a few options available to consumers.

A Fin24 reader currently in debt review can no longer afford to repay her debt. She turns to an expert to find out if she should go to court to cancel her debt. She writes:

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

I was recently made redundant and did not contribute to a pension/provident fund. I now only receive a Sassa pension of R1,850 per month. I am 61 years old. Current balance with my debt review agent is R68,000. Can I go to court to have this amount written off or reduced? My debt review officers advised that it could be costly – money that I don’t have.

Renée Marais, registered and independent debt counselor in pretoria, respond :

Without access to the debt review order and repayments you have made since 2012, I cannot give you specific advice. Each consumer’s situation is unique and there is no one-size-fits-all solution. However, I will try to answer generally.

The debt review begins with a court order that reorganizes/restructures the debt incurred by reducing the installment and extending the duration of payments. The only way out of debt review is to pay off all debt and receive a clearance certificate. A High Court directive was issued in September 2019 explaining what the National Credit Act prescribes regarding the exit from debt review and the remedies contained therein.

A debt review order can only be reviewed or appealed if there is a material or procedural problem with the order and the rules of the various courts are strict. A magistrate’s court cannot vary or set aside a debt review order after the prescribed time.

This case must therefore be returned to a High Court with a tolerance for why the application for cancellation or modification or substitution is brought more than 10 years after the court order in the District Court . It is possible, but it is risky and expensive litigation.

Unfortunately, a court cannot conclude that your debt should be written off. Also, a state pension received by the government cannot be used for debt repayment.

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After the severance, there is usually a payment that could have been used to enter into early settlement agreements with credit providers or if you had credit life protection on credit agreements that purported to settle your debt.

The Debt Counselor is unable to provide you with any assistance after the Debt Review Order is granted except for the Clearance Certificate. Debt counselors do not work for credit grantors, credit bureaus, or debt collectors because the National Credit Law prohibits it. The debt counselor also cannot help you with anything related to insurance, unless they are a registered financial services provider, which is also against the law.

Here is a link to a Fin24 Debt Review commentary with more information: Analysis: Everything you need to know about the Debt Review or Facebook page CONSUMER QUESTIONS ABOUT THE DEBT REVIEW or COMPLAINTS ON DEBT REVIEW. Much information is freely available to consumers.

My advice is to contact your husband’s executor or contact a lawyer to help you. Legal Aid, one of the University’s legal clinics, may be able to help you. Otherwise, try Legal Aid SA.

Legal aid contact details

  • Telephone 1: 011 877 2000 (National office reception)
  • Telephone 2: 0800 110 110 (free legal aid line)
  • Phone 3: 0800 153 728 (Legal Aid Ethics Helpline)
  • Phone 4: 079 835 7179 (number please call me)
  • Email: [email protected]
  • Facebook: @LegalAidSA1.

*Warning: I am not a lawyer and my opinion does not constitute legal advice and should not be construed as such.

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