What happens once I have my debt review clearance certificate?

Working at a debt review agency like Libertine Consultants can be a little strange at times – for one thing, unlike other businesses, we see it as a good thing when our clients don’t need us anymore. For most companies that would mean they did something wrong, but in our line of business it means we did our job well, and our clients are now free to go on and live their lives free from the shadow of debt.

In the course of providing over-indebted South Africans with our comprehensive range of debt services and credit services, there are a few things we are asked almost every day. One of the most frequently asked questions is ‘what happens once I have my debt review clearance certificate?’.

This makes sense; after all, when you take the big step of admitting that you need help to regain control of your finances, you want to know when you will be able to take that big sigh of relief and get on with living your life. So, in short, here’s what you need to know:

What exactly is a debt review clearance certificate?

It is a letter issued to you by your debt counsellor that states that your debt has been settled in accordance with your debt restructuring plan. This means that all of your unsecured debt has been paid up; that (where applicable) your bond or mortgage payments and other long-term payments are up to date; and that your debt counselling fees have been paid as well. Your debt counsellor will distribute this notice to all of your credit providers, as well as the relevant credit bureaus.

Does receiving a debt review clearance certificate make me eligible to secure new lines of credit?

The short answer is no, not straight away. You need to factor in the time it takes for your credit providers to check in with the credit bureaus to ensure them that your debt has been paid up, and then some more time has to be allowed for the bureaus to update their records. To play it safe, assume that you will not have access to any new lines of credit for at least three months.

Also keep in mind that your credit score is not going to be great just after debt counselling. Give it some time and allow the credit bureaus to adjust your credit score upward before you apply for any additional credit. In fact, if possible, try to steer clear of taking on any debt for at least a year if you can. Try to live within the means of your income for a while with the advice provided to you by your debt counsellor.

There you have it – what to expect once you have your debt review clearance certificate, in a nutshell. Keep an eye on the blog in the coming weeks and months for more expert insight into everything associated with debt review in South Africa. In the meantime, feel free to reach out to a member of the Libertine Consultants team if you want to learn more about the services we offer.