Credit score and debt

Debt review in South Africa

Debt review is a legal process for people who can't keep up with their debts. Here is how it works, what it costs and how it affects your credit.

See how debt review works
Written by LM editorial teamLast reviewed

Short answer

Debt review is a legal process where a registered debt counsellor restructures your repayments under the National Credit Act. It can lower your monthly instalments, but you can't take new credit until you get a clearance certificate.

What debt review is

Debt review is also called debt counselling. Section 86 of the National Credit Act sets out how it works.

You apply to a debt counsellor registered with the National Credit Regulator (NCR). The counsellor checks whether you are over-indebted.

In plain terms, that means you can't keep up with all your credit repayments.

If you are over-indebted, the counsellor proposes a new repayment plan. It can stretch the term, move payment dates or cap interest and fees.

A Magistrate's Court or the National Consumer Tribunal must approve the plan. The new terms are then fixed for the duration.

  • Who can apply: people who struggle with monthly debt repayments but can still pay a reduced amount.
  • Married in community of property: both spouses must apply.
  • Not covered: a debt where the credit provider has already taken court steps to enforce it (section 86(2)).

How debt review works, step by step

This is the usual order, based on sections 86 and 71 of the National Credit Act.

  1. Check that the debt counsellor is on the NCR register of debt counsellors. A registered counsellor has an NCRDC number.
  2. Apply and pay the application fee. The counsellor must give you proof that it received your application.
  3. The counsellor tells the credit providers in your application, and every registered credit bureau, that you have applied.
  4. The counsellor assesses whether you are over-indebted. It also checks whether any of your agreements look like reckless credit.
  5. If you are over-indebted, the counsellor proposes a restructured repayment plan to your credit providers.
  6. The plan goes to a Magistrate's Court or the National Consumer Tribunal for approval.
  7. You pay one monthly amount to a payment distribution agency, which pays your creditors. Debt counsellors may not collect and pay out these funds themselves.
  8. When you have met all your obligations under the plan, the counsellor must issue a clearance certificate.
  9. Within 7 days, the counsellor must file a copy with the NCR's national register and every credit bureau.

Have a home loan? You can get a clearance certificate before it is paid off. You need no arrears on the restructured agreements, and every other debt in the plan settled (section 71(1)).

What debt review costs

Debt review is not free. Debt counsellors charge fees in line with an NCR fee guideline.

The NCR published the fees below in August 2021. Ask your counsellor for its current fees in writing before you sign.

FeeWhat the NCR listed in August 2021
Application feeR50, paid upfront before the assessment starts
Administration feeR300 per application, paid upfront
Restructuring feeEqual to your distributable amount, up to R8,000 for one applicant. Up to R9,000 if you are married in community of property. Paid once, in month one.
Reckless lending assessmentR1,500
Aftercare fee5% of the distributable amount, up to R450
Submission to the National Consumer TribunalR500, excluding the Tribunal's filing fee
Attorney feesAgreed with the attorney and explained to you when you apply

Source: NCR media release, August 2021. Fees may have changed since then, so get the current list in writing. The distributable amount is what you pay each month for your creditors.

What debt review means for you

Debt review gives you protection, but it also limits you until it ends.

  • No new credit. Once you apply, you may not take on new credit, apart from a consolidation agreement (section 88(1)).
  • A flag on your credit record. Credit bureaus may show a debt restructuring order until a clearance certificate is issued (regulation 17).
  • Protection from court action. Credit providers may not use the courts to enforce a debt under review. That changes if you default on the restructured repayments (section 88(3)).
  • Apply before legal action starts. You can't add a debt the credit provider has already started enforcing in court.
  • A longer term. The plan may extend your agreements, so you may pay for longer.
  • Removal at the end. After the clearance certificate, the accounts that were under debt review must be removed from your credit record.

Can you leave debt review?

It depends on how far the process has gone. The rules are strict.

Early on. Since 7 March 2022, NCR guidelines say you can't withdraw voluntarily before your counsellor issues a Form 17.2.

After a court or Tribunal order. The National Financial Ombud says the only way out is a clearance certificate.

No order yet, but no longer over-indebted. The Ombud points to a 2019 court ruling. You or your counsellor can ask a Magistrate's Court to declare you no longer over-indebted.

A credit provider ending it. If you are in default, a credit provider may give notice to end the review. It can do so at least 60 business days after you applied (section 86(10)).

It can't end the review once your application has been filed with a court or the Tribunal.

Thinking of leaving? Speak to your debt counsellor first, or call the NCR on 0860 627 627.

Check your counsellor, avoid scams and know your options

Search the NCR register of debt counsellors by name, trading name or NCRDC number.

Talk to your creditors. Ask for a lower instalment or a payment plan before you fall far behind.

Consider consolidation. If you can still afford your debts, one loan may make them simpler. See our guide to debt consolidation loans.

Make a budget. List your income and essential costs, then see what you can pay each creditor.

Complaints. The NCR takes complaints about debt counsellors on 0860 627 627. The free National Financial Ombud handles disputes with credit providers on 0860 800 900.

  • A registered counsellor has a certificate showing their name and NCRDC number.
  • The NCR has warned about misleading adverts, such as promises to cut your instalments by 60%.
  • Don't pay your monthly debt amount to the counsellor. It should go through a payment distribution agency.
  • Get every fee in writing before you sign anything.

Debt review in South Africa: frequently asked questions

Is debt review free?

No. Debt counsellors charge fees in line with an NCR fee guideline, so ask for them in writing upfront. The NCR on 0860 627 627 and the National Financial Ombud on 0860 800 900 are free to contact.

Can I get a loan while under debt review?

Not in the usual way. Section 88(1) of the National Credit Act stops new credit once you apply for debt review. A consolidation agreement is the only exception.

How long does debt review stay on my credit record?

Credit bureaus may show it until a clearance certificate is issued. You get the certificate once you have met your obligations under the plan. After that, the accounts under debt review must be removed from your record.

Can I cancel debt review?

Only in limited cases. Since March 2022, NCR guidelines say you cannot voluntarily withdraw early in the process. After a court or Tribunal order, the National Financial Ombud says only a clearance certificate ends it.

Can creditors take me to court during debt review?

Not for debts under review, while you keep to the plan. Section 88(3) stops credit providers enforcing those debts through the courts. If you default on the restructured repayments, they can act.

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