Debt Review Explained
What is Debt Review?
Debt review is a legal process under South Africa’s National Credit Act that helps over- indebted consumers reduce their monthly repayments and protect their assets (house and car), while working towards becoming debt-free through a structured repayment plan approved by a court.
How Debt Review Works in South Africa:
1. Free Affordability Assessment
A registered debt counsellor reviews your income, monthly expenses, and outstanding debts to determine whether you are over-indebted and whether debt review may help improve your financial situation.
2. Application Submitted to a Registered Debt Counsellor
You formally apply for debt review by providing documents such as your ID, proof of income, bank statements, and details of your credit agreements. This allows the debt counsellor to begin the legal process.
3. Credit Bureaus and Credit Providers Notified
Once your application is accepted, your debt counsellor notifies the credit bureaus and all credit providers that you have applied for debt review. This ensures that the process is formally recorded and managed.
4. Interest Rates and Terms Renegotiated
Your debt counsellor works with credit providers to renegotiate repayment terms where possible. This may include reduced interest rates, extended repayment periods, or adjusted instalments to make repayments more affordable.
5. New Repayment Plan Created
Based on your financial assessment and negotiations with creditors, a new repayment plan is created that combines your debts into a single affordable monthly payment.
6. Court Order Granted
The proposed repayment plan is submitted to court to be made a legally binding restructuring order. This ensures that all parties follow the agreed repayment structure.
7. One Monthly Payment Until All Debts Are Cleared
You make a single consolidated monthly payment through a Payment Distribution Agency (PDA). The PDA distributes payments to your credit providers until all debts included in the plan are settled.
Who Qualifies for Debt Review?
- You are struggling to meet monthly debt repayments / in arrears with your accounts.
- You receive a stable income.
- You have more than one credit agreement.
- You are not already under sequestration.
Costs & Fees
(NCR guidelines)
Debt Review Fee Structure Explained
| Fee Type | Amount | When It's Paid | What It Covers |
|---|---|---|---|
| Application Fee | R50 (once-off) | Month 1 | Admin + application processing |
| Administration Fee | Up to R300 (once-off) | Month 1 | Credit checks, notifications |
| Debt Counselling Fee | Equal to 1 month's reduced instalment (capped at R8,000 single / R9,000 joint application) | Month 1 | Professional restructuring + negotiations |
| Legal Fee | Varies (court application) | Month 2 | Attorney & court process |
| After-Care Fee | 5% of monthly instalment (capped at R450 per month) | Month 3 onward | Ongoing support, distribution & compliance |
**For more detailed information, refer to the following sources:
- Debt Counselling Fee Structure Guideline – National Credit Regulator
- Debt Counsellors Association of South Africa – Debt Review Fees Explained
The Pros & Cons of Debt Review
Pros
- Legal protection from creditors.
- Lowered & consolidated monthly instalment.
- Asset (house & car) protection.
Cons
- Cannot take on new credit.
- Listed/’flagged’ on credit bureaus.
- Process takes time.
Frequently Asked Questions
Is debt review a good idea in South Africa?
Does debt review write off your debt?
so that your debts can be repaid in a more affordable and manageable way.
How do I know if I need debt review?
can realistically afford after covering essential living costs like rent, groceries, transport,
and utilities.
Can I exit debt review early?
Yes. If you can settle the remaining balances sooner than expected, you can complete the process early and receive your clearance certificate.
Will my salary be affected by debt review?
How long does debt review usually last?
afford to repay each month.
Can debt review reduce my monthly repayments?
Yes. Debt review restructures your repayment plan, so it fits your affordability. In many cases, consumers see significant reductions in their monthly instalments after negotiations with credit providers.
Real interest reduction calculation examples?
Watch this video: https://www.youtube.com/shorts/QDtpcS1LHrI
Do I need to pay fees upfront?
What information do I need to apply?
To begin the assessment, you will normally need:
- A valid South African ID.
- Proof of income.
- Recent bank statements.
- Details of your credit agreements.
- A basic list of your monthly expenses.
Will debt review stop legal action from creditors?
Can I take new credit while under debt review?
credit. This helps you focus on settling your existing debts and improving your financial
stability.
Will debt review appear on my credit record?
Yes. Credit bureaus will note that you are under debt review. This is a temporary status (/flag) and will be removed once you complete the process and receive your clearance certificate.
What happens after I finish debt review?
When all debts included in the repayment plan are settled, your debt counsellor issues a Clearance Certificate (Form 19). This confirms completion and instructs credit bureaus to remove the debt review flag.
Can debt review protect my assets?
In many cases, debt review can help protect assets such as your home or vehicle by
restructuring payments and preventing accounts from escalating to repossession or legal enforcement.
What happens if my income changes during debt review?
If your financial situation changes, your debt counsellor can reassess your repayment plan. Communicating early is important so adjustments can be considered before payments are missed.
What happens if I miss a payment during debt review?
Missing payments can put your repayment plan at risk and may affect your legal
protection. If your financial situation changes, it’s important to contact your debt counsellor immediately so your plan can be reviewed or adjusted.
This page was reviewed by Wikus Olivier, NCR-registered Debt Counsellor (NCRDC3143), with 15+ years’ experience in consumer debt solutions.
