“I was placed under debt review when I lost my job two years ago. I’m employed again and can now  pay my debts and even look at getting credit again, but because I’m under debt review I cannot do so and my debt counsellor is refusing to issue me a clearance certificate. What are my options here?”

The National Credit Act allows a debt counsellor to issue a clearance certificate when a consumer has settled all obligations covered by the debt review, or shows they are able to cover future liabilities, including mortgage or other long-term obligations, provided other credit agreements have been settled in full. This allows a consumer to exit from debt review once their shorter-term debts have been settled, but without having to pay up long-term debt such as a mortgage bond.But, if a debt counsellor refuses to issue a clearance certificate, what then? Our courts have had occasion to consider the situation of such a consumer whose ability to settle their short-term debt obligations has improved, but a clearance certificate is being refused.

In short, it appears as if there are two avenues for a consumer to follow if a debt counsellor refuses to issue a clearance certificate, the applicable avenue being determined by the manner in which the consumer was placed under debt review. What is clear, is that a consumer cannot approach the High Court to have him declared no longer over-indebted.

The first avenue is where a consumer applies for debt review and obtains an order to this effect from the Magistrate’s Court. In such a case, the appropriate steps to be followed if the debt counsellor refuses to issue the clearance certificate, is for the consumer to approach the National Consumer Tribunal with the relevant facts, who can then instruct the debt counsellor to issue the clearance certificate.

The second avenue is where a consumer was declared over-indebted by the debt counsellor but such was not made an order of the court. In this situation, the appropriate steps would be to place the additional information pertaining to the consumer’s financial position before the Magistrate’s Court and the Magistrate should then logically be able to find that the consumer is not over-indebted.

Given that both avenues may involve some complication, it may be advisable to approach an attorney to assist you with representations to your debt counsellor and any further steps that may be needed, should the debt counsellor continue to refuse to issue the clearance certificate.