Rehabilitation puts an end to your insolvent status and the disadvantages of being deemed to be an insolvent. The fact that you are sequestrated is also expunged from your credit report which will be updated to reflect that you have since been rehabilitated. In terms of Regulation 17 of the National Credit Act 34 of 2005, the fact that you have been rehabilitated will be listed on your credit report for a period of 5 years.

• The following are frequently asked questions about Rehabilitation after Sequestration

  Q: Generally, when can I apply to be rehabilitated?

  A: After 4 years calculated from the date on which you were sequestrated.

  Q: What is the cost of a rehabilitation application?

  A: We charge a set fee for rehabilitation applications. Fees can be paid off over a maximum period of 6 months. In some instances we do allow clients to pay our fee over 12 months. Before we quote, we evaluate whether you can apply for rehabilitation, as we only quote if we can assist.

  Q: Does our fee for rehabilitation, include processing the removal of the sequestration notice from the credit bureaux so that my credit record can show that I have since been rehabilitated?

  A: YES

  Q: What happens if we find that I do not qualify to apply to be rehabilitated once I have instructed you to attend to my rehabilitation application?

  A: If you do not qualify to be rehabilitated then we would stop the process immediately and you would not be liable for the balance of the fee. Whether you do qualify to be rehabilitated will become apparent once we have looked at your Liquidation and Distribution account to check whether any contribution was levied against your creditors. If a contribution was levied, you would have to pay this contribution back to the creditors in order for you to qualify to be rehabilitated. Where the aforesaid occurs, clients either pay the contribution immediately or request that we suspend work on their instruction pending them raising the contribution amount.

  Q: Do I have to pay my legal fees to be rehabilitated by way of direct debit instruction?

  A: If you are not comfortable to have your instruction processed by way of direct debit instruction, then you can make payments directly to us on a monthly basis. Where this is done, we only release the rehabilitation order and process the updates with the credit bureaux once our fee has been paid in full.

  Q: What happens if at the time that I was sequestrated I had property that was bonded and which was subsequently sold as part of the sequestration process for less than the amount due to the creditor? Do I have to pay this amount back in order to be rehabilitated?

  A: Immovable property subject to a bond renders the creditor (bond holder) a secured creditor which simply means that the creditor is entitled to be paid out of the proceeds of the sale of the property. Where the property is sold and there is a shortfall from the sale, the balance (shortfall) becomes a concurrent claim which is payable from the free residue of the estate. Adequate satisfaction of a concurrent claim is at least 20 Cents in the Rand. A secured creditor when proving their claim can elect to rely exclusively on his security and in doing so the creditor waives their right to recover any shortfall amount from the free residue. A secured creditor may choose to rely exclusively upon their security in order to avoid having to contribute to the costs of sequestration in the event that there is not sufficient residue to cover the costs of sequestration. Thus, it may or may not be necessary to pay back any shortfall that may have arisen when the bonded property was sold. Before embarking on a rehabilitation application, we do obtain details of the Liquidation and Distribution account from the Trustee and to check whether the insolvent is liable to repay any monies to any secured creditors thereby avoiding wasted legal costs in pursuing a rehabilitation application where there is in fact a shortfall that the insolvent cannot pay.

The following are frequently asked questions about the cancellation of debt review.

Q: I want to remove my name under debt review but have not finished paying my debt. Is it possible?

Yes, this can be done if your debt review was made an order of court and the court order is subsequently rescinded OR an application is made to court to have you declared “not over-indebted.”

Q: I have paid up all my accounts that were under debt review but my credit report still reflects the debt review status. What must I do to remove the debt review status from my credit report?

A: Request a clearance certificate from your debt counsellor and submit it to the credit bureau. The credit bureau will then remove the debt review status from your credit report. In terms of the new National Credit Amendment Act 14 of 2014 which became effective on the 13th of March 2015, the clearance certificate can also be provided where there is an outstanding mortgage agreement or any other large credit agreement which reflect no arrears and are up to date and all the small credit agreements have been paid up.

Q: Please advice on how exiting the debt review prematurely will affect my credit record & do you think I can qualify to get credit finance immediately after exiting debt review?

A: Once the debt review process is terminated the debt review status will be removed from your credit report thereby improving your creditworthiness. We also advise that you get your latest credit reports and check whether any of your credit reports contain negative information other than the debt review status as any other negative information can affect your credit application even once the debt review status has been removed from your credit report. After all, whether you will be able to obtain finance after the removal of the debt review status depends upon the general state of your credit report.

Q: My debt review was a consent order that was confirmed by the National Consumer Tribunal. Can this be set aside?

A: Besides the powers given in the National Credit Act 34 of 2005 to the Magistrate’s Court to grant a court order confirming the reduced payment arrangements with the consumer, the said Act also gives the National Consumer Tribunal the power to grant a consent order confirming the resolution or reduced payment arrangements. Where a consent order has been granted, it is important to note that in terms of section 165 of the National Credit Act, an order granted by the National Consumer Tribunal can only be rescinded or varied in any one of the following instances:

1. Where the order was erroneously sought or granted in the absence of a party affected by it;
2. Where the order contains an ambiguity, or an obvious error or omission, but only to the extent of correcting that ambiguity, error or omission;
   
3. Where the order was made or granted as a result of a mistake common to the parties to the proceedings.