What Is Debt Review in South Africa?
Debt review, also known as debt counselling, is a formal debt relief process established under Section 86 of the National Credit Act (NCA), Act 34 of 2005. It provides a legal mechanism for over-indebted South African consumers to restructure their debt repayments into a single, reduced monthly payment that they can realistically afford. The process is overseen by a registered debt counsellor and, once approved by a court or the National Consumer Tribunal, provides legal protection against creditors taking action to repossess assets or pursue legal judgments.
Debt review was introduced specifically to help consumers who are genuinely struggling with debt to avoid the more severe consequences of financial distress, such as sequestration (personal insolvency), legal judgments, and asset repossession. Since its introduction, millions of South Africans have used debt review to regain control of their finances.
As of early 2026, with household debt levels remaining elevated following years of high interest rates, debt review continues to be one of the most important consumer protection tools available in South Africa. The National Credit Regulator (NCR) reports that the number of consumers under debt review has grown steadily, reflecting both the scale of indebtedness and increasing awareness of this legal remedy.
How Does the Debt Review Process Work?
The debt review process follows a structured, legally defined sequence of steps. Understanding each stage helps consumers know what to expect and ensures they can participate effectively in the process.
Step 1: Application to a Registered Debt Counsellor
The process begins when you approach a registered debt counsellor and complete a Form 16 application. The debt counsellor must be registered with the NCR — you can verify this on the NCR website. During the initial consultation, the counsellor will gather comprehensive information about your financial situation including all your debts, income, essential living expenses, and assets. This consultation is typically free or included in the overall debt review fees.
Step 2: Assessment of Over-Indebtedness
The debt counsellor conducts a thorough affordability assessment to determine whether you are genuinely over-indebted. Under the NCA, you are considered over-indebted if your total monthly debt obligations exceed your available income after essential living expenses. The counsellor reviews your credit bureau records, payslips, bank statements, and expense declarations to make this determination. If you are found to be over-indebted, the debt counsellor issues a Form 17.1 certificate confirming this status.
Step 3: Notification to Credit Providers and Credit Bureaus
Once you are accepted into debt review, the debt counsellor notifies all your credit providers and the credit bureaus within 5 business days. This is a critical step because, from this point, your credit providers are legally prohibited from taking any further legal action against you — no summonses, no judgments, no repossession of assets (provided you continue making the restructured payments). A "debt review" flag is placed on your credit record at all major bureaus.
Step 4: Proposal to Credit Providers
The debt counsellor develops a restructured repayment plan that reduces your monthly obligations to an affordable level. This is achieved through a combination of extending repayment periods, negotiating reduced interest rates, and in some cases negotiating reduced settlement amounts. The proposal is sent to all credit providers for their consideration. Credit providers have 60 business days to accept or reject the proposal.
Step 5: Court Order or Consent Order
If credit providers accept the proposal, a consent order is filed with the Magistrate s Court, making the restructured payment plan legally binding on all parties. If any credit provider rejects the proposal, the debt counsellor can apply to the Magistrate s Court for a debt restructuring order. The court will assess the fairness of the proposal and, if satisfied, issue a court order that is binding on all credit providers regardless of whether they consented.
Step 6: Restructured Payments Through a PDA
Once the court order is in place, you make a single monthly payment to a Payment Distribution Agency (PDA). The PDA distributes the funds to your various credit providers according to the court-ordered repayment plan. This simplifies your financial management — instead of juggling multiple payments to different creditors, you make one payment each month.
Step 7: Clearance Certificate
Once you have paid all your debts in full (excluding your home loan, which continues under normal terms), the debt counsellor issues a clearance certificate (Form 19). This certificate is submitted to the credit bureaus, which must remove the debt review flag from your credit record. You are then free to apply for new credit.
Who Qualifies for Debt Review?
To qualify for debt review in South Africa, you must meet specific criteria established by the NCA.
You must be over-indebted: Your total monthly debt repayments must exceed what you can reasonably afford after covering essential living expenses such as food, housing, utilities, transport, and medical costs. If you can comfortably meet all your debt obligations, you do not qualify for debt review.
You must have a regular income: Debt review requires ongoing monthly payments, so you need a source of income — whether from employment, a business, a pension, or another regular source. Consumers with no income at all may need to consider alternative options such as administration or sequestration.
You must not have had a judgment entered against you: If a credit provider has already obtained a court judgment against you for a specific debt, that particular debt may be excluded from the debt review process. However, your other debts can still be included.
You must have credit agreements governed by the NCA: Debt review covers debts regulated by the NCA, including personal loans, credit cards, store cards, vehicle finance, home loans, and overdrafts. It does not cover debts to SARS, municipal rates and taxes, or maintenance obligations.
Benefits of Debt Review
Debt review offers several significant benefits that make it an attractive option for over-indebted consumers.
Legal protection from creditors: Once you enter debt review, creditors cannot take legal action against you, repossess your vehicle, or foreclose on your home — provided you maintain the restructured payments. This protection is enforceable by law and gives you breathing room to stabilise your finances.
Reduced monthly payments: By extending repayment periods and negotiating lower interest rates, your total monthly payment is reduced to a level you can genuinely afford. Reductions of 30-60% on monthly obligations are common.
Single monthly payment: Instead of managing multiple payments to various creditors, you make one payment to the PDA, which distributes funds to all your creditors. This dramatically simplifies your financial management.
Prevents asset repossession: Your home, vehicle, and other financed assets are protected from repossession as long as you remain compliant with the debt review order.
Structured path to debt freedom: Debt review provides a clear, court-ordered timeline for becoming debt-free. You know exactly when each debt will be paid off, giving you a concrete goal to work towards.
No new debt accumulation: While in debt review, you cannot take on new credit. Although this feels restrictive, it actually prevents the cycle of borrowing to pay existing debts that traps many consumers.
Costs of Debt Review
Debt review is not free — debt counsellors charge regulated fees for their services. However, these fees are prescribed by the NCA and cannot exceed the following maximums:
Application fee: A once-off fee of R50 (including VAT) is payable when you apply for debt review. This covers the initial administrative processing of your application.
Rejection fee: If your application is rejected (because you are not found to be over-indebted), a fee of R300 (including VAT) is payable. This covers the assessment work conducted by the debt counsellor.
Acceptance and restructuring fee: If accepted, a fee of R8,000 (including VAT) is charged for the debt restructuring work, including negotiations with credit providers and obtaining the court order. This fee is typically included in your restructured monthly payments and paid over time — you do not need to pay it upfront.
Ongoing aftercare fee: A monthly aftercare fee of 5% of your monthly instalment is charged for ongoing management of your debt review. This covers monitoring your account, distributing payments, and handling any issues that arise with credit providers.
PDA fees: The Payment Distribution Agency charges a fee for distributing payments to your creditors. This is typically R30-R40 per payment distributed.
How Debt Review Affects Your Credit Score
Entering debt review has a significant impact on your credit record, and it is important to understand these consequences before making your decision.
Once you enter debt review, a "debt review" flag is placed on your credit profile at all major credit bureaus (TransUnion, Experian, XDS, Compuscan). This flag effectively prevents you from obtaining any new credit for the duration of the debt review process. Your credit score will decrease substantially, and all your listed accounts will show a debt review status.
However, debt review is often a better outcome for your credit record than the alternatives. Defaults, judgments, and asset repossessions cause even more severe and longer-lasting damage to your credit score. By entering debt review and making consistent payments, you demonstrate responsible behaviour, and your credit record will show debts being paid rather than defaulted.
Once you receive your clearance certificate and the debt review flag is removed, your credit record begins to recover. The debt review listing itself is removed, and your paid-up accounts reflect as settled. While it takes time to rebuild your credit score after debt review, many consumers find they can access credit again within 6-12 months of receiving their clearance certificate.
Debt Review vs Other Debt Relief Options
Debt review is not the only option for over-indebted consumers. Understanding the alternatives helps you choose the most appropriate solution for your situation.
Debt Review vs Debt Consolidation
Debt consolidation involves taking out a single new loan to pay off all your existing debts, leaving you with just one monthly payment. Unlike debt review, consolidation does not provide legal protection from creditors, and you need to qualify for a new loan — which may be difficult if your credit score is already impaired. However, consolidation does not restrict your ability to take on new credit, and it may resolve your situation more quickly if you can secure a lower interest rate.
Debt Review vs Administration
Administration is an older legal process under the Magistrate s Court Act for consumers whose total debts do not exceed R50,000. An administrator manages your debt repayments similarly to a debt counsellor, but the process is less structured and offers fewer consumer protections than debt review. Administration is rarely recommended today because debt review provides superior protection.
Debt Review vs Sequestration
Sequestration (voluntary surrender of your estate) is the most extreme debt relief option. It involves declaring personal insolvency, and a trustee is appointed to sell your assets and distribute the proceeds to creditors. Sequestration should be considered only as a last resort, as it results in the loss of most assets and has severe, long-lasting effects on your credit record and ability to hold certain positions. Debt review is almost always preferable to sequestration.
Can You Exit Debt Review?
Yes, there are several ways to exit debt review, depending on your circumstances.
Clearance certificate: The standard and recommended way to exit is by completing all payments and receiving your clearance certificate (Form 19). This formally concludes the debt review and removes the flag from your credit record.
Early settlement: If your financial situation improves — for example, through a salary increase, inheritance, or lump sum — you can pay off your remaining debts early and request a clearance certificate immediately.
Court application to rescind: In some circumstances, you may apply to the court to have the debt review order rescinded. This is typically done if your financial situation has improved significantly and you no longer require the protection of debt review. However, this option requires careful legal consideration, as exiting prematurely could expose you to aggressive collection action.
Voluntary withdrawal: You can withdraw from debt review before the court order is granted by notifying your debt counsellor in writing. However, once a court order is in place, voluntary withdrawal is not straightforward and usually requires a court application.
How to Choose a Debt Counsellor
Choosing the right debt counsellor is crucial to a successful debt review experience. Here are key factors to consider.
NCR registration: Verify that the debt counsellor is registered with the National Credit Regulator. You can check this on the NCR website (ncr.org.za) or by calling the NCR at 0860 627 627. Never use an unregistered debt counsellor.
Experience and track record: Look for a debt counsellor with several years of experience and positive client testimonials. Ask how many clients they currently manage and what their success rate is in obtaining court orders and clearance certificates.
Transparency about fees: A reputable debt counsellor will clearly explain all fees upfront and confirm they comply with the NCA-prescribed maximums. Be wary of any counsellor who charges fees that seem unusually high or demands large upfront payments.
Communication: Your debt review process may take several years, so you need a counsellor who communicates clearly and responsively. Ask about their communication channels — do they provide online portals, regular statements, and accessible phone support?
Accreditation: Many reputable debt counsellors are members of professional bodies such as the Debt Counsellors Association of South Africa (DCASA) or the National Debt Counsellors Association (NDCA). Membership indicates a commitment to professional standards and ethics.
Frequently Asked Questions About Debt Review
How long does debt review take? The duration depends on your total debt and monthly payment capacity. Most debt review plans run for 36-60 months, though some can be shorter if you have the means for higher payments, or longer for very large debt loads.
Can I keep my car during debt review? Yes. One of the key benefits of debt review is that your vehicle is protected from repossession, provided you continue making the restructured payments as ordered by the court.
Will my employer know I am under debt review? Debt review is not directly communicated to your employer. However, if your employer conducts a credit check (for example, in the financial services industry), the debt review flag will be visible on your credit report.
Can I include my home loan in debt review? Yes, your home loan can be included in the debt review restructuring. However, unlike other debts, your home loan may continue beyond the formal debt review period (since home loans typically have 20-30 year terms). Your clearance certificate is issued once all other debts are paid, even if the home loan continues.
What happens if I miss a payment during debt review? Missing payments during debt review is serious. Your debt counsellor will typically contact you to understand the situation. If non-payment continues, credit providers may apply to the court to have the debt review order terminated, which would remove your legal protection and allow them to pursue collection action.
Can self-employed people apply for debt review? Yes. Self-employed individuals can apply for debt review, provided they have a regular income. The debt counsellor will assess your business income over several months to determine your average monthly earnings for the affordability assessment.
Take the First Step Towards Financial Freedom
If your monthly debt repayments are consuming more than you can afford, debt review may be the solution that gives you breathing room and a clear path to becoming debt-free. The process is designed to protect you while ensuring your creditors are repaid fairly over time.
Use RandCash to compare your options. Whether debt review, debt consolidation, or restructuring your existing loans is the right choice depends on your specific circumstances. Our comparison tools help you understand the costs, benefits, and alternatives so you can make the best decision for your financial future.