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Withdrawing from Debt Counselling

Prior to 2015, if a consumer wanted to exit the debt counselling process , they would have to contact the respective Debt Counsellor and request cancellation, in which case a Form 17.4 (voluntary withdrawal from debt counselling ) would be issued to all parties involved and the consumer would be able to successfully withdraw from the debt counselling process. However, in 2015 a revised set of guidelines were issued detailing new instructions on how consumers under debt counselling could exit the process, and subsequently remove the debt counselling flag from their credit profile. It is important to note that a Debt Counsellor may no longer terminate or withdraw a client from the debt counselling process. This means that a Debt Counsellor can no longer issue a Form 17.4, but they are allowed to suspend their service if they feel that the client is not co-operating (e.g. non-payment, no relevant proof, etc.). As per the revised guidelines, a client can only exit the process once all obligations stated in the debt counselling agreement have been satisfied (excluding a home loan, which must just be paid up to date and not be in arrears). In addition to this, if a court order which protects the re-arranged credit agreements has already been obtained, then the client may approach the court to get the court order rescinded or apply for a new order to declare they are no longer over-indebted. That is the only way they would be able to exit the process and liaise directly with creditors from there onwards. Upon receipt of the order, the Debt Counsellor will notify credit providers of the withdrawal by issuing a form 17.W (c – for rescission, d – for no longer over-indebted) and update the NCR system. Once updated, a consumer’s status will reflect on the Credit Bureau’s side, who will update the consumer’s credit status. If however, the court order has not yet been issued and the 17.2 form (a document stating you are over-indebted and the Debt Counsellor has accepted your request to go under debt counselling) has not yet been sent to the credit providers, a client may still request termination of the process. If the 17.2 form has already been sent, the client must then approach a magistrate/high court or get assistance from an attorney to obtain a 17.W (d) for exiting the process.

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