Your Rights Regarding Credit Clearance

Understanding your rights is crucial when rehabilitating yourself after financial trouble, whether that’s debt review, judgment, sequestration, or an administration order. Once you’re aware of your rights, the path to disputing derogatory items on your credit profile becomes tangible.

Using your understanding of your rights to credit clearance and what the legislation says, you can enlist an attorney or take the appropriate avenues to rehabilitate yourself after debt re-arrangement or an order. In this post, we discuss the various ways you can dispute derogatory marks, what the legislation says, and who can help you execute the process.

Let’s dive in!

The National Credit Act

The National Credit Act (NCA) was introduced to the South African credit economy in 2005. Since then, it’s governed debt enforcement, the rights and responsibilities of debtors and creditors, and bureaux disputes. These are the key rights it governs regarding credit clearance.

Debt Review Clearance Certificates

• The Act says you’re allowed to apply for a clearance certificate (also called Form 19) at any time during debt review; however, your debt counsellor is allowed to reject your application if your debts are not fully paid. (Section 71)If you want to dispute your debt counsellor’s decision, you can apply to the Tribunal court, which can order your debt counsellor to issue you a certificate (Section 71 (2)(b)[I])
• You can file a copy of your clearance certificate with the credit bureaus, which must remove all records of debt review and what led to debt review. It’s illegal for them not to. (Section 71 [5 to 7])
• The National Credit Regulator (NCR) can issue a bureau a compliance notice if they fail to remove the record from your credit record (section 55). To access this right, contact the National Finance Ombudsman of South Africa (NFOSA).

Once you’ve completed debt review, it’s your right under the National Credit Act to apply for a clearance certificate and use it to remove all records of debt review and the debts included in debt review from your credit profile. You can contest the decisions of those who are not compliant.

Challenging Your Credit Record

• Section 72 (1) (b) says that everyone has the right to see their credit record from a bureau once per year for free. It also says the Tribunal court can order a bureau to give you another credit report for free if you want to verify information challenged after debt help (for example, submitting a clearance certificate).
• You can ask the bureaus to investigate the wrong information on your credit report for free (section 72 [2]). The bureaus must take steps to investigate your claim and correct it if you’re right. They’re also not allowed to show information you’ve challenged until the dispute has been resolved (sections 3 to 5 of 72).

Rescinded Judgments

Section 71 of the NCA sets out how debt adjustment and re-arrangement records should be removed. Section 6 reads, “Upon receiving a copy of a court order rescinding any judgment, a credit bureau must expunge from its records all information relating to that judgment.”

What About Administration Orders and Sequestrations?

Section 71 applies to administration orders and sequestrations, too. Subsection 5 says, “Upon receiving a copy of a clearance certificate, a credit bureau, or the national credit register, must expunge from its records…the fact that the consumer was subject to the relevant debt re-arrangement order or agreement.” Further on, it also says that what led to the order must be removed, too. Administration orders and sequestrations are both debt re-arrangement orders.

The National Credit Act doesn’t explicitly set out the process for obtaining the appropriate forms to submit to the bureaus, as these debt arrangement methods are governed by the Magistrates Court Act.

To remove an administration order from your credit profile, you must apply to the court for a 74Q Rescission Court Order. If you would like to expunge a sequestration, you must apply for a rehabilitation order, then your attorney must send a letter to the bureaus confirming that you have been rehabilitated. Credit Rehab can help with both of these matters.

Why Enlist Credit Rehab?

Credit Rehab has an in-house attorney firm that works closely with our team of credit clearance practitioners. Together, our experts work tirelessly to help our clients regain access to credit, whether that’s after debt review, a judgment, sequestration, or an administration order.

Enlist a Credit Rehab for assistance obtaining a rehabilitation order, writing bureau dispute letters, rescinding judgments, and applying for clearance certificates with the court.

Take your first steps to financial agency. Contact us today.