blacklisted clear your
The term "blacklisted" sounds terrifying, but it becomes a real pain when you want to start acquiring a large loan and try to get finance from a bank or financial institution.Having your name blacklisted means you are not eligible to receive credit and lenders see you as a risk they are not willing to take.
Why do you get blacklisted in South Africa?
People who incur unnecessary debt find themselves in a position where they are no longer able to service those debts. Failure to pay debts has long-term consequences, and you will be labelled a defaulter next time you apply for liability, your name will be flagged on credit bureau as bad payer this means you've been blacklisted and won't qualify for a loan or vehicle finance.
How can i be removed from blacklistng??
The good news is that it is possible for us to clear your name with the credit bureaus. It might not be an easy road ahead but we can certainly do it. The path to getting off the blacklist is tedious but worth it. It will allow you to build a sound financial future if you can get yourself on the right side of the credit bureaus.
1. I is important to know what is going on with your credit profile
as a South African citizen, you can receive one free credit report per year. Pull a credit report from one of the reputable credit bureaux e.g experian, transunion or xds, so you can see which items on your profile are causing the issue.
2. Get your arrears up to date
The number one issue that leads to blacklisting is when accounts are in arrears. Pay up your accounts as soon as possible. The fact that it was in arrears in the first place will remain visible on your record for many months but we can update this earlier for you, but if you can show good payment behavior after we have updated your credit record file for 3-6 months, your odds of securing credit will be much more improved.
4. Bring defaulted accounts up to date
Bring defaulted accounts up to date or settle it outright. Once this is done, we can negotiate with your credit provider to remove the default listing, which has a significant impact on how your credit score is calculated.
Clearing your credit profile is unfortunately not as easy as just paying your outstanding debts. Once you have been blacklisted, you can have a bad credit report for up to ten years, depending on the type of listing that you have against your name. You need the assistance of a specialist to improve your credit rating. We have years of experience assisting individuals and entities with credit bureau clearance.
Numerous companies claim to be able to help you clear a bad credit profile, but many of them are not really in a position to do so. We have 10 years’ experience in credit clearance and helping people restore their credit worthiness . The types of listings which can be recorded on your credit profile are broken down into categories:
1.3 Administration Order
1.4 Debt Review
3.Adverse (Default) Listings
Sequestration is when a person is declared insolvent because their liabilities are greater than their assets; Sequestration is sometimes referred to as bankruptcy or insolvency and can be either voluntary or compulsory.
Voluntary Sequestration is when the debtor him/herself applies to court for the acceptance of the “surrender of his/her estate”. A court can accept the surrender of the debtor’s estate and grant the Sequestration order only if it is satisfied that: the debtor’s estate is in fact insolvent, the debtor’s estate is able to pay for the costs of Sequestrating the estate and that the Sequestration is advantageous to the creditors. By law a person will only be treated as insolvent once his / her estate has been sequestrated by the court. A Sequestration Order is a formal declaration stating that the debtor is insolvent.
The second way in which a debtor’s estate may be sequestrated is called “Compulsory Sequestration”. This type of Sequestration is made on application by one or more of the debtor’s creditors. A court may grant an application for the sequestration of a debtor’s estate if it is satisfied that:
The applicant (creditor) has established a claim against the debtor
The debtor has committed an act of insolvency or is insolvent
There is reason to believe that it will be to the advantage of creditors
When you are rehabilitated it means that you are no longer insolvent and can be allowed to trade on normal terms. Rehabilitation enables the insolvent to make a fresh start, free from his pre-sequestration debts and from the restrictions placed on him by the Sequestration. Rehabilitation may take place automatically after 10 years from date of Sequestration or by application to the Court who granted the Sequestration Order. The Rehabilitation process takes approximately 8 – 10 weeks, provided all requirements have been complied with.
1.3 Administration order
An Administration Order is a listing that results from your indebtedness to various creditors of not more than R50 000. These creditors apply to courts of law to have the debt paid through an Administrator.
If you are (A) not in the position to pay all your debts; (B) these debts are not more than R 50 000.00; and (C) you do not own any other property, which may be sold to pay the debts; you may apply for an Administration Order.
This will protect you from your creditors and no one may take judgment against you, however, this is temporary. In terms of the Administration Order, the court decides how much you need for basic necessities, and then determines how much must be paid to an Administrator.
The Administrator then makes payments every 3 months to your creditors. The cost of an Administration Order can be very high and you should consult with an attorney to check these costs in order to make an informed decision before a formal application is made.
An Administration Order will remain against your credit report for 10 years unless you settle the outstanding debts and costs and approach Hahn & Hahn Attorneys to assist with the rescission and removal thereof.
1.4 Debt Review
Debt review is a type of mediation process for over-indebted consumers. A consumer can seek the help of a debt counselor. The main purpose of debt counseling is to assess a debtor’s state of indebtedness, facilitate a monthly debt repayment plan with the credit providers and to make recommendations to credit providers and / or magistrate courts on behalf of over – indebted consumers
Debt counseling restructures installments to allow the debtor to pay his / her debt and meet their basic living expenses. Debts are paid monthly.
If you fall behind with your debt payments and fail to respond to reminder letters, your creditor will send you a letter of demand. If you fail to respond to the letter of demand a summons will be served. You have 10 days to defend the summons, after which your creditor will apply to court for a Default Judgment without further notice to you. A judgment means that a court has ordered you to pay your debt.
A judgment will remain listed at the credit bureaus for 5 years but the debt is valid and enforceable for 30 years.
3. Adverse (Default) listing
Adverse listings are recorded at a credit bureau if you opened an account and failed to make the required monthly payments. Your credit provider will contact a credit bureau directly requesting the adverse to be listed against your credit report.
If the default relates to an enforcement action, such as the collection being handed over for recovery, legal action being taken or the debt being written off, the default remains on your credit report for two years. If the default relates to a subjective classification of your behavior, such as delinquency, slow paying, absconding or not being contactable, the default remains on your credit report for 12 months.
Adverse listings can in most circumstance be updated to a “Paid in full” status upon instruction of your creditor. Adverse listings can only be removed in limited circumstances and after a full investigation by the Credit Bureaus themselves. It is important to at least have the listing amended to reflect that the account was paid in full.
4. Trace Alert
A Trace Alert is recorded on your credit profile when a creditor requests a credit bureau to notify them of any updated contact information which is loaded onto your credit profile as they have been unable to contact you due to outdated contact information.
5. Payment Profile
Payment Profile is a summary of your monthly account payments. The most important way of improving your credit profile is to pay your accounts on time. Each month your payments are recorded in the Payment Profile section of your credit profile and provided you have been paying your accounts on time for at least six months, or preferably a year, you stand a far better chance of being granted credit.
6. Collection information
Collection Information relates to accounts that have been handed over to a collection agency. We at Hahn & Hahn Attorneys can contact the collection agency to obtain the outstanding balance and make comfortable payback arrangements on your behalf. Once the debt is settled we will ensure that the Collection Information is removed from your credit profile.
How do I avoid being blacklisted?
1 - Pay all your accounts monthly before the due date as arranged with your creditors when opening the account
2 - Notify all your creditors of a change of address.
3 - Attend to legal documents and letters immediately.
4 - Should you be unable to pay your debt, contact your creditor immediately to make suitable arrangements and keep to these arrangements. Where possible have your creditor confirm the new arrangements in writing and keep the correspondence for possible future reference.
5 - Be careful of what you sign. Peruse documents first and contact us for assistance should you require advice