When consumers find themselves in a state of over-indebtedness, one of the unfortunate results is that they are left with a poor credit record. Due to this bad record they are unable to apply for credit again in the future. This is a situation which is difficult to rectify for the average consumer.
In this regard, the debt review process provided by National Debt Counsellors plays an important role in enabling financial security for consumers going forward.
Upon the completion of the debt review, the consumer is issued with a clearance certificate that clears your record with all the major credit bureaus. You emerge with a rehabilitated credit record and are once again be able to apply for a loan or credit, should you require it.
This clearance certificate is an official letter issued by your debt counsellor to state that your debt is paid in full, according to the debt restructure plan provided for this purpose.
Upon receiving this clearance certificate, the major credit bureaus remove the debt counselling flag from your official profile. Added to this, all your default listings and judgements are removed.
As such, the following conditions are to be met before you are issued with a clearance certificate, officially referred to as Form 19:
- The accounts which were listed under debt review have been settled in full
- These include all of your accounts except for a home loan, which must be paid up to the date as per the debt review agreement.
The repayment plan provided by your debt counsellors is designed to help you achieve the above conditions in a simple and affordable manner. While your repayment plan is being followed, all the major bureaus are notified of the fact that you are under debt review.
This is done in order to prevent your credit providers from contacting you with legal letters or phone calls, and indicates that you are in the process of fulfilling your debt obligations and solving your over-indebtedness.
Being flagged under debt review also protects you from having your assets claimed by credit providers in order to satisfy your outstanding debt.
In other words, this debt review flag provides you with important safeguards while you continue to repay your debt according to the payment plan issued by your debt counsellors.
The clearance certificate not only provides you with a clean credit record, but it shows the relevant bureaus that you are no longer under debt review, and that you no longer require the services of your debt counsellors.
This process of clearing your credit score can take about three months after your debt has been paid in full, while your credit providers work to notify the credit bureaus that your debt obligations have been fulfilled.