Letter to cancel debt review (template)

Send this to your debt counsellor in writing and keep a copy. Replace each [PLACEHOLDER].

[YOUR FULL NAME]
[YOUR ID NUMBER]
[YOUR ADDRESS]
[YOUR EMAIL]  |  [YOUR PHONE]

[DATE]

[DEBT COUNSELLOR / FIRM NAME]
[THEIR EMAIL OR ADDRESS]

RE: Notice of intention to cancel / withdraw from debt review
    Reference [YOUR DEBT REVIEW REF]

Dear [DEBT COUNSELLOR NAME],

I am writing to give notice that I wish to cancel or withdraw from debt review.
My reason is [BRIEF REASON - e.g. my income has recovered and I can manage my
accounts; I no longer wish to proceed].

Before I take any further step, please confirm to me in writing:
  1. the exact stage my matter has reached (application only, proposal sent,
     pending court date, or court order granted);
  2. whether I am able to withdraw at this stage and, if so, how;
  3. if a court order has been granted, what my options are to exit, including
     completing the plan and obtaining a [clearance certificate](/debt-counselling/debt-review-clearance-certificate/);
  4. all outstanding balances on the debts in my plan and any fees due; and
  5. the consequences of withdrawing, including the loss of protection against
     creditor legal action.

Please do not stop distributing my payments or take any irreversible step until
you have confirmed the above and I have replied to confirm how I wish to proceed.

Yours faithfully,

[YOUR FULL NAME]
ID number: [YOUR ID NUMBER]

It depends entirely on the stage. If you have only applied and no magistrate has yet made the debt review an order, you can usually withdraw, and the way to do that is in writing through your debt counsellor, following the proper process. The earlier you are, the simpler it is.

Once a court has granted a debt review order, you generally cannot just cancel it. At that point the lawful way out is to complete the restructured plan and receive your clearance certificate, or in limited cases to apply to court to vary or rescind the order, which usually needs an attorney. So the first thing to establish, before anything else, is whether a court order already exists in your matter.

Debt review gives you real legal protection: while you are properly under it, creditors are restricted from taking legal action against you for the debts in the plan, and your instalments and interest have usually been reduced. If you cancel, that protection falls away.

That means creditors can resume normal collections and, if you are in arrears, move toward legal action, summons and judgment. The reduced instalments and any frozen or lowered interest also typically revert. Before cancelling because your income recovered, work out whether you can genuinely afford the original instalments again, using a fresh budget, so you do not cancel your protection only to fall behind once more.

It helps to separate two things people lump together. Cancelling means stopping the debt review process, which is mainly an option before a court order. Removal means coming off debt review the clean way once you qualify - by completing the plan and getting a clearance certificate (Form 19), after which the flag is removed in about 21 business days.

If your goal is simply to be free of the debt review flag because you have paid up, you do not need to cancel; you need your clearance certificate and a debt review removal request. Cancellation is really for people who want to stop the process before it concludes, and it carries the trade-off of losing protection. Decide which one you actually want before sending any letter.

• Stopping payments without confirming your stage. Defaulting does not cleanly cancel anything and can trigger legal action.
• Confusing cancel with remove. If you have paid up, you want a clearance certificate, not a cancellation.
• Cancelling without a fresh budget. Make sure you can afford the original instalments again before giving up your protection.
• Acting on verbal advice. Get your stage, options and fees confirmed in writing by your debt counsellor before you decide, and seek attorney advice if a court order is already in place.