Why “Cancelling” Your Debt Review Could Hurt You More Than Help

Beware: Why “Cancelling” Your Debt Review Could Hurt You More Than Help

We’ve noticed a rise in consumers requesting Form 17.W, often at the suggestion of third parties. While this might seem like a quick way to regain financial control, withdrawing from debt review through Form 17.W usually has serious negative consequences. Here’s what every South African consumer needs to understand about the real impact of Form 17.W.

What is Form 17.W?

Form 17.W is a legal notice sent to creditors indicating that a consumer has withdrawn from debt review, often due to non-cooperation. However, it doesn’t erase the debt review status from your profile, nor does it improve your creditworthiness. This flag will remain unless you complete the debt review process or the court officially rejects your debt review proposal.

Misconceptions About Cancelling Debt Review

Many believe that using Form 17.W will help them regain access to credit more quickly, but this is a misconception. The debt review flag remains visible to creditors, and stopping the process does not fast-track credit improvement.

What Happens if You Cancel a Good Debt Review Plan?

1. Higher Interest Rates

Cancelling a debt review plan with lower interest rates means you’re agreeing to a new plan with higher rates. This change increases the total amount you’ll need to repay over time. Even if your monthly payments seem lower, you’ll pay much more overall because of the higher interest.

2. Longer Time to Pay Off Debt

With the higher interest, it will take longer to pay off your debt. More of each payment goes toward interest instead of reducing the debt itself, so even if monthly payments are smaller, you might stay in debt longer—or even see your debt grow.

3. Unexpected Consequences

If someone encourages you to leave your debt counsellor without explaining the full consequences, you could feel misled once you realize the impact. Lower payments can seem appealing but often lead to bigger issues later. Remember, the only way to remove the debt review flag is by following the legal process. Cancelling debt review also means losing its protections against legal action.

4. Trusting Your Debt Counsellor

Your debt counsellor is here to help you make the best financial decisions. We understand how interest and repayment work and can guide you through a realistic plan. Ignoring our advice could lead to choices that harm your financial progress.

Conclusion

Cancelling debt review via Form 17.W is unlikely to benefit your financial situation. Consider the long-term impacts and consult a qualified debt counselor before making decisions. Professional guidance can be invaluable in managing debt effectively and improving financial health.

– written by Nadia de Weerdt (Sandton Debt Counselling) & DCASA Western Cape Branch Representative