Debt can become difficult to manage gradually. A higher interest rate, an unexpected expense or a change in income may leave you paying one account with another and still falling behind.
If your contractual debt repayments no longer fit your budget after reasonable living expenses, debt review—also called debt counselling—may provide a structured way forward. It is a formal process created by South Africa’s National Credit Act and must be handled by a debt counsellor registered with the National Credit Regulator (NCR).
This guide explains how to start, what information you may need and what you should understand before making a formal application.
First, understand what debt review does
Debt review is designed for consumers who are over-indebted. A registered debt counsellor assesses your income, essential household expenses and credit obligations to determine whether you can meet your repayments as they currently stand.
If you are found to be over-indebted, the debt counsellor develops a more affordable repayment proposal and engages with your credit providers. The proposed arrangement must then be formalised through the appropriate legal process.
Debt review does not cancel your debt. It aims to make repayment more manageable while giving you the protections provided by the National Credit Act, as long as you meet the requirements of the process and continue paying as agreed.
Step 1: Speak to a registered debt counsellor
Begin with a confidential conversation about your circumstances. At this stage, ask questions and make sure you understand the process before signing a formal application.
You should confirm that the debt counsellor is registered with the NCR. The NCR maintains a register of debt counsellors on its website. It is also worth asking who will handle your matter, how you will receive updates, what the fees are and how payments will be distributed.
The Debt Doc is registered with the NCR under registration number NCRDC4143.
Step 2: Complete an initial financial assessment
The debt counsellor will need a realistic picture of your household finances. This normally includes:
- Your monthly income and income frequency
- Essential household expenses
- Details of your credit agreements and outstanding balances
- Arrears, collection activity or legal notices you have received
- Information about assets linked to credit agreements, such as a vehicle or home
The purpose is not to judge how you arrived at this point. It is to establish whether debt review is appropriate and whether a workable repayment proposal can be developed.
Step 3: Gather the supporting documents
The exact requirements may differ, but you may be asked for documents such as:
- A copy of your identity document
- Recent payslips or other proof of income
- Recent bank statements
- Credit-provider statements or account details
- Proof of regular household expenses
- Any section 129 notices, summonses or other legal correspondence
Tell the debt counsellor immediately if legal action has already started on an account. Timing matters, and not every account can necessarily be included once particular enforcement steps have been taken.
Step 4: Decide whether to make a formal application
An enquiry or initial discussion is not the same as formally applying for debt review. Before submitting an application, make sure you understand the consequences.
Once you formally apply, the relevant credit providers and credit bureaux are notified. You may not take on further credit while the debt-review restrictions remain in place. A debt-review indicator will also be recorded on your credit profile until the process is properly completed and a clearance certificate can be issued.
Step 5: Assessment and repayment proposal
The debt counsellor verifies the information supplied and determines whether you are over-indebted. If you are, a repayment proposal is prepared using the amount that is realistically available after reasonable living expenses.
The proposal may involve extending repayment periods and changing how available funds are allocated. Any changes to interest, fees or contractual terms are not automatic guarantees; they depend on the proposal, the credit providers and the resulting consent order or court order.
Step 6: Legal formalisation
Where debt restructuring is recommended, the matter is referred through the appropriate legal process so that the repayment arrangement can be made binding.
The National Credit Act limits enforcement in qualifying circumstances, but the protection is not unconditional. It is important to apply before enforcement has progressed too far, provide complete information and keep making the required payments. Missing payments under the rearrangement can place that protection at risk.
Step 7: Make the agreed monthly payments
Many consumers make one monthly payment through an NCR-registered Payment Distribution Agent, which distributes the money to participating credit providers according to the repayment plan. The NCR also notes that consumers may pay credit providers directly, depending on the arrangement.
Debt review is not a payment holiday. Payments must continue consistently, and reduced instalments can mean that repayment takes longer. Keep your payment records and review distribution statements so that problems can be addressed early.
What debt review can—and cannot—do
Debt review may help by:
- Creating a repayment plan based on what your household can reasonably afford
- Providing one organised process for dealing with multiple credit agreements
- Allowing reasonable living expenses to be considered before debt repayments are allocated
- Providing protection against enforcement in the circumstances set out in the National Credit Act, while you comply with the arrangement
- Creating a clear route towards settling the debts included in the process
It does not erase debt, guarantee lower interest on every account, guarantee that an asset can never be repossessed or produce an immediate improvement in your credit score. You also cannot take out further credit while you remain under debt review.
What happens when the process is completed?
Once the requirements for clearance have been met, the debt counsellor issues a clearance certificate and the relevant credit bureaux and credit providers are notified. The debt-review indicator should then be removed from your credit profile in accordance with the applicable process.
Rebuilding a strong credit profile may still take time. The most important outcome is that you have completed a regulated repayment process and can move forward without the debts covered by the clearance process.
Take the first step without pressure
You do not need to decide everything before asking for help. A confidential assessment can help you understand whether debt review is suitable for your circumstances and what alternatives may exist.
Request a free confidential assessment or read how debt counselling works before deciding whether to apply.
This article provides general information and is not legal or financial advice. Eligibility, legal protection and clearance depend on individual circumstances and the applicable legal process.
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