It just became much easier to wipe out a bad-debt judgment once you’ve paid up â€` but you may not want to

Source: Business Insider SA, 13/03/2019

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It just became a whole lot easier to reverse a bad debt judgment in
South Africa.
As of this week it is no longer necessary to show a court that there
is a good reason to wipe out such a judgment, in a (previously fairly
painful) process known as rescission.
Instead an individual or company now just has to show that the debt
has been paid, in full and with any interest plus any costs that were
due. On that basis alone a judge can reverse a bad-debt judgement,
with or without the consent of the party that originally obtained the
debt judgement, and can do so in chambers, without even the need for a
court appearance.
That new system is set out in section 14 of a change to legislation,
the Courts of Law Amendment Act, dating from mid-2017. But section 14,
dealing with bad-debt judgments, only came into force on Monday, when
President Cyril Ramaphosa declared it to be in effect.
Laywers who deal with debt collection and blacklisted consumers say
the change is a radical one, yet will have surprisingly little
real-world impact for blacklisted consumers, while companies could
benefit significantly.
Until this week a debtor with an outstanding judgment had to provide
“good cause” as to why such a judgment had to be reversed, says Nicole
Andrews of Joselowitz & Andrews Attorneys, a firm with a special
interest in debt matters.
Such actions tended to be complex and costly, with no guarantee that a
court would accept the reasons given.
But practically speaking, many blacklisted people who have
rehabilitated their finances may not end up using the new provision.
A bad-debt judgment will typically see consumers blacklisted by credit
bureaus. Checks for new credit are usually against those credit bureau
databases, not against court records themselves. And as of February
2014, in terms of regulations that apply to credit bureaus, they are
required to remove information that related to bad-debt judgments once
such debts have been paid.
That means a blacklisted person can write to the credit bureaus, have
the details of a judgment removed, and access new credit, without
having to go to court at all.
“For individuals who have paid their judgment debts in full, I would
suggest having the listings removed in terms of the amnesty
regulations; it is a quicker and more cost effective remedy than
attending to a court application,” says Natasha La Vita of Berndt & La
Vita Attorneys, which deals both in debt collection for companies and
credit rehabilitation for blacklisted consumers.
That quick and cheap credit-bureau route only applies to individuals
though, La Vita points out, while the new rules on judgment rescission
can also be used by companies that have paid off their debts in full.