“Debt Review in South Africa: How It Works, What It Costs, How Long It Lasts and How to Get Out”
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What Debt Review Is
Debt review is for consumers who are over-indebted. That means that after paying basic living costs, there is not enough money left to pay all the monthly debt instalments on time.
A debt counsellor compares your income with your living expenses and your debt payments. If you are over-indebted, the counsellor asks your credit providers to accept smaller instalments, usually over a longer period. The new plan becomes a consent order of the National Consumer Tribunal or an order of the magistrate’s court, and your credit providers must follow it.
Debt review is not a loan and it does not cancel your debt. You still pay back what you owe, only in smaller amounts. The NCR says the debt review flag on your credit record is not a blacklisting. It shows that you are under debt counselling.
Who Can Apply
- You have a regular income but cannot keep up with all your debt repayments.
- You are not already under debt administration. The NCR says people under administration cannot apply.
- If you are married in community of property, you and your spouse must apply together.
- If you are married out of community of property, you can apply alone.
There must be some money left over after living costs to share among your credit providers. A counsellor cannot build a plan if there is nothing to pay with.
If a credit provider has already started legal action to enforce a specific agreement (section 130 of the Act) before you apply, that agreement cannot be included in the debt review.
How Debt Review Works, Step by Step
| Step | What happens | Time limit or form |
|---|---|---|
| 1. Apply | You fill in Form 16 and give the counsellor your payslips, statements and a budget | R50 application fee |
| 2. Notice | The counsellor tells all your credit providers and the credit bureaus that you applied | Form 17.1, within 5 business days |
| 3. Balances | Each credit provider sends its latest balance on your account | Within 5 business days of the notice |
| 4. Assessment | The counsellor decides if you are over-indebted and tells everyone the outcome | Form 17.2 |
| 5. Proposal | The counsellor sends a repayment plan with lower instalments to the credit providers | Negotiation |
| 6. Order | If all credit providers agree, the plan goes to the National Consumer Tribunal for a consent order. If one says no, it goes to the magistrate’s court | The NCR says the process should be done within 60 business days of applying |
| 7. Payments | You pay the new instalment each month, often through a registered Payment Distribution Agent | Every month until the debts are paid |
| 8. Clearance | When the debts are paid, the counsellor issues a clearance certificate | Form 19, within 7 days |
There is no payment holiday. The NCR says you must keep paying as your debt counsellor tells you from the start. If you miss payments, a credit provider can end the debt review and take legal steps against you.
What the counsellor can decide
Section 86 of the National Credit Act gives three possible outcomes after the assessment:
- Not over-indebted: the application is rejected.
- Not over-indebted, but struggling or likely to struggle: the counsellor can suggest a voluntary payment plan between you and your credit providers.
- Over-indebted: the counsellor sends a proposal to the court to rearrange your payments, for example by stretching the period and lowering the instalment, and can ask the court to declare an agreement reckless credit.
What Debt Review Costs
Debt counselling is not free. The NCR says the counsellor must tell you all fees in writing before you sign. In its 2021 article on debt counselling, the NCR set out these guideline fees:
| Fee | Amount in the NCR guideline |
|---|---|
| Application fee | R50, paid upfront |
| Administration fee | R300 per application, paid upfront |
| Restructuring fee (once-off, month one) | Your first restructured instalment, capped at R8,000 for one person or R9,000 for a couple married in community of property |
| Aftercare fee (monthly, after month two) | 5% of the monthly amount, capped at R450 |
| Reckless lending application | R1,500 once-off, only if there are strong grounds |
| Submission to the National Consumer Tribunal | R500, plus the Tribunal’s filing fee |
| Attorney fees (court route) | Agreed with the attorney and told to you when you apply |
These are the NCR’s guideline figures from August 2021. Ask your counsellor for the current fees in writing and keep receipts for everything you pay.
What Changes While You Are Under Debt Review
| Topic | What happens |
|---|---|
| New credit | You may not take new credit or use your credit facilities (section 88 of the Act) |
| Legal action | Once your credit providers are notified, they may not go to court to enforce those agreements while you keep to the process |
| Credit record | The credit bureaus show a debt counselling flag until the clearance certificate |
| Car and home | Protected from repossession through the courts as long as you keep paying the order |
| Credit provider takes you to court | A credit provider may not end the debt review once it has been filed in court or at the Tribunal |
A credit provider that gives you new credit while you are under debt review risks having that credit declared reckless.
How Long Debt Review Lasts
The Act does not set a fixed length. Debt review lasts until the debts in your plan are paid. The NCR puts the first part, from your application to the court or Tribunal referral, at about 60 business days. After that, the length depends on how much you owe and how big your monthly payment is. Paying extra when you can, for example from a bonus, makes it shorter.
How to Get Out of Debt Review
The normal way out is the clearance certificate. Section 71 of the National Credit Act says your debt counsellor must issue it within seven days once one of these is true:
- You have paid all the debts in the debt review in full.
- You have paid all the short-term debts (such as store cards, credit cards, personal loans and car finance), and the only debt left is your home loan, which is up to date.
The counsellor must then send a certified copy to the national credit register and all credit bureaus within seven days. The bureaus must remove the debt review flag and the old default information linked to it.
If your debt counsellor refuses or fails to issue the certificate, you can ask the National Consumer Tribunal to review it. If the counsellor issues it but does not send it to the bureaus, you can file the certified copy with the NCR yourself and lay a complaint.
Can you cancel debt review early?
Leaving by choice is not one of the ways section 88 of the Act ends the debt review restrictions. Once there is a court or Tribunal order, getting out early without paying in full normally needs a legal process. Be careful of companies that promise quick “debt review removal” for a fee. Before you pay anyone, ask the NCR or get free advice from Legal Aid South Africa if you qualify.
How to Choose a Debt Counsellor Safely
- Ask to see the counsellor’s NCR registration certificate. It shows a number starting with NCRDC.
- Check the number on the NCR’s register of debt counsellors at ncr.org.za, or call the NCR on 0860 627 627.
- Ask for every fee in writing before you sign.
- Keep copies of your application, the proposal, the court or Tribunal order and every proof of payment.
- Be careful of adverts that promise you will save a fixed share of your instalments. The NCR calls promises of about 60% savings misleading.
The NCR’s call centre (0860 627 627) works from Monday to Thursday, 08:00 to 17:00, and on Friday from 08:00 to 16:30. Complaints about a debt counsellor go to [email protected].
Before You Choose Debt Review
Debt review is a long commitment. Look at your monthly budget first and cut what you can. If you are a low-income household, check if your municipality offers free basic electricity and water. For more money guides, see our money section.
Debt Review Questions
How long does debt review last?
There is no fixed time in the law. It lasts until the debts in your plan are paid, which depends on how much you owe and how much you can pay each month.
Does debt review expire?
No. It does not end by itself after a number of years. It ends when you get a clearance certificate, when the court finds you are not over-indebted, or when a credit provider ends it because you stopped paying.
How do I check if I am still under debt review?
Ask your debt counsellor for your status and a copy of your order. You can also get your credit report from a credit bureau, which shows the debt review flag until the clearance certificate is filed.
How do I get out of debt review?
Pay all the debts in your plan, or all of them except a home loan that is up to date. Your counsellor must then issue a clearance certificate (Form 19) within seven days and send it to the credit bureaus.
Can I get a loan while under debt review?
No. Section 88 of the National Credit Act stops you from taking new credit while you are under debt review, and a lender that gives you credit then risks it being declared reckless.
What happens after debt review?
The credit bureaus must remove the debt review flag and the default information linked to it once they get the clearance certificate. After that, you can apply for credit again, and lenders will look at your new record.
More: Legal Aid South Africa, free basic electricity and water and our money guides.