Debt Review Upliftment versus Rescission of a Debt Review Court Order
There are two ways to exit the debt review process, namely Rescission of Judgment, or an Application for Upliftment of the Debt Review.
Which process is appropriate to pursue depends on the facts of each matter. Specifically, Debt Review Upliftment is appropriate where no Court Order has been granted placing the consumer under Debt Review. In instances where the Magistrates’ Court has made an Order placing the consumer under Debt Review and restructuring their debts, the appropriate course of action is to proceed with a Rescission of Judgment.
Debt Review Upliftment
In instances where the consumer has not had their debts restructured by means of a Court Order, the Consumer can apply to the Magistrate’s Court in terms of Section 87(1)(a) of the National Credit Act, 34 of 2005. In this instance, the Consumer must satisfy the Court that they are no longer over-indebted and that they should not be placed under Debt Review. Once the Court has made such an order, the Debt Review Flag can be removed by the credit bureaus.
Rescission of a Debt Review Court Order
Where the Consumer has already been placed under Debt Review by a Court Order, their obligations have already been restructured by the Magistrates Court. An Order granted by the Magistrates Court can only be rescinded / set aside in accordance with the Rules of Court (Rule 49) and the Magistrates’ Courts Act, 32 of 1944 (Section 36).
It is much harder to exit the debt review process once a Court Order has been granted.
The consumer will have to show good cause why the Court Order must be rescinded and not only prove that they are now in a position to pay their creditors in the normal course (that they are no longer over-indebted). I good example of when a consumer will be able to rescind a debt review Court Order, is when the consumer has since entered debt review, gotten divorced and all of the consumer’s debts have been settled, but their ex-spouse still has outstanding accounts.
