This is what happens when debt review is terminated

When it comes to ‘terminating’ debt review, there’s a right way to do it—and a wrong way.

Don’t make the mistake of doing it the wrong way.

Here’s how it works, and more importantly, what happens.

 

What happens when debt review is terminated?

When debt review is terminated, the applicant gives up the benefits, such as legal protection. Debts must then be paid back based on the original agreements. Which means creditors can start collecting money again, charge higher interest, and even take legal action. Debt review can be terminated voluntarily (before a court order), due to non-compliance (like missing payments), or through a court order.

Termination due to non-compliance has serious consequences. It isn’t a smart way to ‘get out of debt review’.

We’ll go over the three types of termination next. Then, you’ll see why.

 

 

Types of termination

There are three ways that debt review may be terminated:

1. Voluntary termination
2. Termination due to non-compliance
3. Termination by court order

 

1. Voluntary termination (before a court order is granted)

Before a court makes the debt review official, a person can ask to stop the process. This is done by sending a written request to the debt counsellor. If that happens, credit bureaus are updated, and the person is no longer listed as “under debt review.”

But once it ends, credit providers can start collecting again and charge the original interest rates.

Important: Voluntary termination after a court order is no longer legally permissible under current interpretations of the National Credit Act. After a court order, exiting debt review requires either completing the process of applying for a court rescission.

It is also important to note that even if someone voluntarily terminates debt review before a court order, the “under debt review” flag on their credit record doesn’t automatically disappear.

The flag will stay on the credit profile unless:

• The counsellor processes and submits the withdrawal correctly, and
• The credit bureaus receive and update the information.

 

2. Termination due to non-compliance

Missing payments while under debt review — also called defaulting — can lead to the process being terminated due to non-compliance. According to the National Credit Act, if someone doesn’t stick to the new payment plan, the debt counsellor or credit provider can send notices to the person, the court, and the National Credit Regulator (NCR) to begin the termination process.

Termination due to non-compliance has serious consequences.

Once the debt review is terminated due to non-payment, all the legal protection falls away. Credit providers can demand full repayment based on the original agreements. This is usually a relatively large sum of money. Which means legal action will likely follow.

After non-compliant termination, creditors are quick to send an S129 notice and summons for debt.

⭐ Related content:

• What is a Section 129 Notice? And what happens next…
• What to do when you get a summons for debt in South Africa

 

3. Termination by court order

Debt review can be stopped by a magistrate’s court. This may happen if the court finds that the person is not truly over-indebted, or if the debt review was started with false or wrong information. To ask the court to end debt review, the person (or their lawyer) must apply to the court with proof—like updated income details or proof that debts were listed incorrectly.

If the court agrees, the debt review ends, and the person goes back to their original credit agreements.

That’s how debt review could be terminated.

Now, let’s look at what actually happens.

 

 

Impact of termination

Terminating debt review can have significant financial and legal consequences. These vary depending on the type of termination but often result in the loss of critical protections.

Key consequences of debt review termination:

1. Loss of legal protection
2. Return to original credit terms
3. The person remains “under debt review”
4. Risk of extra legal costs or losing belongings
5. Harder to get new credit

 

1. Loss of legal protection: Once debt review ends, the person no longer has legal protection under the National Credit Act. This means credit providers can start legal action again. They can send court papers or ask for a judgment to collect the money owed.

⭐ Related content: What is a default judgment and how does it work?

 

2. Return to original credit terms: All credit agreements go back to their original terms. That means higher monthly payments, higher interest rates, and it may mean arrears. All of which may be too much to afford.

 

3. The person remains “under debt review”: Even after the debt review is terminated, the “under debt review” flag stays on the person’s credit record until a court removes it or a clearance certificate is given. This can make it hard to get loans or open accounts.

 

4. Risk of extra legal costs or losing belongings: If payments stop or the creditors take legal action and a judgment is granted, creditors may add legal fees and even take back items like a car or home to settle the debt.

 

5. Harder to get new credit: If debt review ends without being completed, the person’s credit profile looks risky. Most banks or lenders won’t give new credit until debts are paid and cleared properly.

 

Ending debt review the wrong way could leave you worse off than when you started. But don’t worry—there are legal steps you can take to protect yourself.

We’ll get to those in a sec.

 

Termination of debt review by the credit provider

A credit provider can try to end the debt review if the person misses payments or if the payment plan no longer works. To do this, they must send a written notice within 10 business days to the person, the debt counsellor, and the National Credit Regulator (NCR).

This kind of termination is called a Section 86(10) notice. But it only works before the debt review is made official by a court order.

Once a court order is in place, the credit provider cannot stop the process on their own. They must follow legal steps and go back to court.

So, what happens if someone stops paying after a court order is in place?

In this case, credit providers can’t use Section 86(10) anymore. Instead, they must ask the court to take further steps.

They may:

• Go back to court to ask for the debt review order to be removed (called a rescission),
• Ask the court for permission to collect the full amount owed.
• Or apply for a court order to take back items like a car or furniture.

 

This means debt review doesn’t protect someone forever if payments stop. But credit providers must still follow the legal process.

 

Can I cancel my debt review?

No, debt review cannot just be cancelled after a court has decided that someone is over-indebted. Once the court gives an official order, the process must be finished properly or taken back by the court. Only people who haven’t yet been declared over-indebted by the court can voluntarily terminate debt review on their own.

If the court has already made a decision, the person must either finish paying off their debts through the plan or apply to the court to end the process because their money situation has changed.

In short, once the court says it’s official, it can’t just be cancelled.

Here’s what needs to happen…

 

How to exit debt review

To legally exit debt review after it is approved by a court order, you must follow a recognised legal process. The steps depend on your situation.

Ways to exit debt review:

• Voluntary termination before court order: Submit a written withdrawal request to your debt counsellor (see steps below).
• Completion: Pay off all debts (excluding an up-to-date bond) and receive a clearance certificate.
• Court rescission: Apply to the court to set aside the debt review if you are no longer over-indebted.
• Debt settlement: Pay creditors directly and follow legal steps to remove your debt review status.

If it’s still early, here’s how to do it voluntarily.

 

How to make voluntary termination work

Voluntary termination can fail if it’s not handled properly. Follow these steps to give it the best chance of success.

1. Act fast: Make sure the court has not yet granted or scheduled a restructuring order. Once that happens, voluntary exit is no longer allowed.

2. Submit a formal, dated request and keep records of your communication: Send a dated, written withdrawal request to your debt counsellor by email, if possible. Keep a copy and request a confirmation of receipt.

3. Contact the NCR: This step is optional, but can be helpful. Call the NCR and explain your situation to ensure that you’re doing everything right. 

4. Follow up regularly.

 

5. Request written confirmation. Ask the counsellor to confirm that:

• Your file has been closed
• The NCR and all credit bureaus have been notified

6. Follow up with the credit bureaus: After a few working days, check your credit status. If the “under debt review” flag is still showing, send your withdrawal letter and proof to the bureaus directly.

 

7. Escalate if necessary: If the debt counsellor delays or refuses to assist, escalate the matter to the National Credit Regulator (NCR) with all of the documentation.

Voluntary termination can be slow. Expect delays. And in some cases, it won’t work. Remember, debt review is part of a legal framework, and everyone has to play by the rules.

Either way, taking these extra steps should help.

 

Final thoughts

Exiting debt review is possible—but doing it wrong can set you back even further. Whether you’re thinking of stopping payments or ending things early, it’s critical to understand the fallout.

Now you know how it works. If possible, talk to a professional and take the right legal route.

Ignoring debt problems doesn’t work. It only makes things more expensive in the end.

If you want a solution. Talk to our team at My Debt Hero. We can help.