Can I Get A Credit Card If I Am Under Debt Review?

By Dave Nyam •  Updated: 03/23/24 •  5 min read

Debt review in South Africa is always the first step toward financial rehabilitation. It’s supposed to be done by people overexposed to debt. It comprises an in-depth view of the condition of one’s financial assessment by a registered counselor and works in negotiations with the creditors toward the structure of repayments.

Can I Get A Credit Card If I Am Under Debt Review?

If you’re under debt review in SA, the window is clearly closed in your face from getting more into extra debt. This also includes applying for new credit cards. Regarding the National Credit Act (NCA), consumers are now discouraged from running more into debt once the debt review process starts because it would not augur well for their walk towards being set free from such debts. You should not be accruing new debts while under debt review. This means that you will only be able to apply for the credit card or use the existing credit cards during that time once you have completed the debt review and issuance of the clearance certificate.

Can I Open A Bank Account If I Am Under Debt Review?

Of course, people in South Africa who are under debt review are compelled to open a new bank account. It is almost the whole essence of ensuring that creditors do not access amounts that are in accounts that a consumer had been using before the debt review process. However, no more credit is to be applied as long as one is in the process of debt review. It’s a measure for better money management and to ensure that you are not mistakenly double-debited by creditors.

Which Bank Can Help With Debt Review?

If you have been put under debt review in South Africa, your banking options will support you with the process. Standard Bank is among the banks that offer such services to their customers. It provides informative debt reviews to help its customers manage their debts.

Others who assist their customers undergoing reviews to clear their debts include Absa Bank and Capitec Bank. That said, TymeBank aims to empower South Africans through transparent financial services that make it possible for one to know and handle one’s money best while under review for debt. It is of paramount necessity that you select one bank that can stand by not only for your assistance in the debt review process but also for your financial management needs and goals.

Can I Pay My Creditors Directly While Under Debt Review?

Yes. If you do want to pay your creditors directly, then you can do so if you are under debt review. A debtor under debt review has two options regarding payment, according to the National Credit Act. The debtor can “pay the debt directly or permit the debt counselor to make such arrangements with the pertinent consumer.” The term should meet/have to be very organized and follow the plan that you set up, your debt counselor, and your creditors. Here, very precise record-keeping and routine communication with creditors and your debt counselor will be very important in making sure discrepancies get resolved correctly and timely. 

Can The Debt Review Flag Be Removed?

Yes, the debt review flag in South Africa can be removed from your credit profile. This normally happens once the Debt Review process is completed and the loans are discharged—all except the attached amounts related to one’s home. Importantly, the process has attached fees and is not free.

You may most likely go to the Magistrate’s Court and apply for rehab, stating that you are no longer over-indebted and that a major development of your financial circumstances has taken place in case you have not concluded the process of debt review or there is still standing debt. Always work with a registered debt counselor, and avoid any firm that promises to remove the flag at no charge since most do not allow that.

How Long Does The Debt Review Flag Stay On Your Name?

Of course, the time duration one would expect the debt review flag to appear on one’s South African credit profile will be determined by the date on which the process is completed. Upon full payment of all the restructured debts, a clearance certificate is, of course, obtained from the respective debt counselor. In fact, legally, it should take up to 21 business days, 3 weeks maximum, for the credit bureaus to remove the debt review flags upon receiving the certificates.

Note that the only debt that may remain outstanding is your house loan. In about three years, the flag can also be removed in case your debts have run their course since creditors cannot demand their pay. In case of any problem or delay in retracting the flag, kindly follow up with the credit bureaus and ensure the clearance is well processed. 

What Happens If I Stop Paying My Debt Review?

Stopping payments while under review for debt is a serious risk. When you stop paying, you, of course, do so at the risk of losing out on all the protection that the process holds for you – protection such as legal protection from your creditors. Your creditors can then go ahead and institute legal action, which can be responsible for summoning cases, judgment, or even repossession of any property against your name.

In addition, if you choose not to pay the full amount, it will most probably make your credit score go bad. Keeping up with the payments as agreed in the Debt Review Plan now holds prime importance because being off-track with the payment can lead a candidate into negative implications and put one’s ability down to attain financial stability. 

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