What is a Debt Review Clearance Certificate?

We’ve all had at least one of those all-too-intense moments of panic when we suddenly remember that we owe someone money or maybe forgot to pay for something we now own. You may be too familiar with these moments of panic because you’re currently in debt and don’t know how to get out of it. 

We can understand.

Debt is not something that anyone strives to accumulate. Through various complicated reasons and circumstances, it can sneak up on you, and before you know it, you’re down a hole. We desire that you live a healthy financial life of freedom, not debt. 

So, here’s another piece to add to the getting-out-of-debt puzzle. We’ve previously gone through what debt rescue is, and today we’re going to take through what a debt review clearance certificate is. 

Let’s jump in!

What is it?

A debt review clearance is a certificate verifying and confirming that you’ve paid your debt in full. Needless to say, it’s an excellent certificate to obtain. 

It means that you’ve successfully satisfied all of your obligations under a credit agreement and are subject to a debt review court order and/or debt review repayment agreement. 

When someone is issued a clearance certificate, it marks the end of a successful debt review process, which is a great time! The effect of this certificate is that even if the person does have a long-term agreement that’s subject to debt review (like a mortgage bond, for example), they can get a clearance certificate after every other short-term credit agreement that was under debt review is paid in full. 

Isn’t that handy?

According to the National Credit Act (NCA) 34 of 2005, a debt counsellor, not a court, must issue a clearance certificate.

How to Obtain it?

The first step would obviously be to begin the debt-reviewing process. Once this process is underway, you can be issued a clearance certificate after you meet one of these two requirements:

• The first one is that if you’ve paid off all of your debts listed in your debt review court order and/or debt review repayment agreement, you’re eligible for a clearance certificate.

• The second one is if all of your short-term credit agreements that are listed in your debt review court order and/or debt review repayment agreement have been paid off in full, and when you’re left only with your mortgage loan that isn’t in arrears in terms of its debt review court order and/or debt review repayment agreement.

Your credit providers must issue letters stating that you’ve paid your debt in full. They’ll need to do this before the issuing of your clearance certificate. 

Once you get your clearance certificate, you’ll need to forward it to all the credit bureaus while also including the letters from your credit providers. Your debt counsellor and the credit bureaus will then have to update their systems to show that you have successfully completed your debt review process.

Financial Freedom, Forever More

When you get your golden ticket (the certificate), you can then begin your new life of true financial freedom! Getting out of debt is a task that requires discipline and patience, but it is well worth it. 

If you’d like to learn more about what financial freedom means for you, just head over to our blog!