What is Debt Review and Is It Right for You?

By / September 15, 2025

If rising instalments, penalty interest, and constant collection calls are turning your month-end into a crisis, you are not alone. […]

What is Debt Review and Is It Right for You

If rising instalments, penalty interest, and constant collection calls are turning your month-end into a crisis, you are not alone. South Africa’s debt review (also called debt counselling) system was created by the National Credit Act (NCA) to help over-indebted consumers restructure what they owe into a single affordable monthly payment, with court or tribunal protection.

This guide explains how debt review works in South Africa, who qualifies, what it costs, the pros and cons, how long it takes, and how to decide whether it is right for you.

Key takeaways

  • Debt review is a legal process under the NCA that reorganises your credit agreements into a realistic repayment plan approved by a court or the National Consumer Tribunal.
  • While under debt review you may not take on new credit, and a “under debt review” flag appears at credit bureaus until you complete the process.
  • You make one consolidated payment each month via a Payment Distribution Agency (PDA), which splits the money to your credit providers.
  • Interest rates and instalments are negotiated down to fit your budget, and credit providers are limited in pursuing enforcement on restructuring agreements.
  • You exit debt review and restore normal credit status after you receive a Clearance Certificate (Form 19) once qualifying debts are settled in line with the NCA rules.

What exactly is debt review?

Debt review is a regulated rehabilitation programme. An NCR-registered debt counsellor assesses your finances, confirms if you are over-indebted, and proposes a restructured repayment plan to your credit providers. Once everyone agrees (or a court/tribunal makes an order), you pay one fixed amount each month. The plan reduces pressure by extending terms and lowering instalments, frequently with reduced interest compared with your original credit agreements.

The aim is not to escape debt, but to repay sustainably, protect essential assets, and prevent a downward spiral into default and litigation.

Who qualifies?

You can usually apply if:

  • You are a natural person (not a company or trust) living in South Africa.
  • You have one or more credit agreements regulated by the NCA (for example: personal loans, credit cards, store cards, overdrafts, vehicle finance, home loans).
  • A realistic budget shows you are over-indebted or you are likely to become over-indebted soon.
  • You have a stable source of income to support a single consolidated repayment.

Debts commonly included

  • Personal loans and consolidation loans
  • Credit cards and store cards
  • Overdrafts and revolving credit
  • Vehicle finance (secured)
  • Home loans (secured)
  • Short-term and payday loans

Debts typically excluded (not NCA credit agreements)

  • Maintenance (child or spousal)
  • Fines, traffic penalties, and some court orders
  • Municipal rates and services
  • TV licence fees
  • Informal debts not governed by the NCA

Note: If legal action has already started on a specific credit agreement before you apply, options for that agreement can be limited. A registered debt counsellor will advise on what can and cannot be accommodated.

How the debt review process works (step-by-step)

  1. Application (Form 16)
    You submit your ID, payslips, bank statements, a list of credit agreements, and monthly expenses to a registered debt counsellor.
  2. Initial protection notice (Form 17.1)
    Within a few business days the counsellor notifies all your credit providers and the credit bureaus that you have applied. From this point, credit providers engage via the process rather than collection harassment, and you must not apply for any new credit.
  3. Assessment and proposal (Form 17.2)
    The counsellor determines if you are over-indebted, checks for reckless credit indicators, drafts a rearrangement proposal, and negotiates with your credit providers. The proposal fits a single affordable monthly instalment into your budget, prioritising essential living expenses.
  4. Court or Tribunal order
    If credit providers consent, the matter is made an order of court or National Consumer Tribunal consent order. If there is no full consensus, the court can still impose a fair restructuring after considering all facts.
  5. Single payment via a PDA
    Each month you pay one amount to a Payment Distribution Agency appointed by the NCR. The PDA disburses funds to each credit provider according to the court/tribunal order. You receive statements showing distributions and balances.
  6. Stay the course
    You maintain the plan, communicate changes in income early, and keep insurance on secured assets (for example, comprehensive cover for a financed vehicle and homeowner’s cover for a bonded property).
  7. Clearance Certificate (Form 19)
    When you meet the legal criteria (for example, unsecured debts fully settled and secured debts up to date in terms of the NCA framework), the debt counsellor issues a Clearance Certificate. The debt review flag is then removed from the credit bureaus, and you re-enter the credit market on a normal basis.

What does it cost?

Debt review carries regulated fees set out in NCR guidelines. Although fee tables change over time, in practice you can expect:

  • A small application fee and an administration/assessment fee.
  • A restructuring fee (often aligned with your first month’s restructured instalment, subject to caps in the guidelines).
  • After-care fees each month while under review (a modest percentage of your instalment, capped by the NCR).
  • Legal fees for obtaining the court or tribunal order.
  • A PDA distribution fee built into your monthly payment.

The important point is that fees are embedded in the plan and should not increase your monthly outlay beyond what your budget can handle. A reputable debt counsellor will provide a written fee schedule before you commit.

Pros and cons of debt review

Advantages

  • Immediate structure and relief: One affordable payment aligned with your budget.
  • Legal protection: Your restructured plan is a court/tribunal order that credit providers must respect, subject to the NCA.
  • Lower instalments and interest: Negotiated reductions can significantly improve cash flow.
  • Stops the snowball: Prevents further adverse escalation, fees, and multiple bounced debit orders.
  • Asset protection: Better chances to keep your car and home by prioritising secured debts responsibly.
  • Reckless credit check: Potential relief where a lender failed to assess affordability properly.
  • Clear path to rehabilitation: Completion earns a Clearance Certificate and removal of the debt review flag.

Disadvantages

  • No new credit while under review. You must learn to operate without borrowing top-ups.
  • Discipline is non-negotiable: Missing payments can collapse the plan and risk enforcement by credit providers.
  • Takes time: Depending on balances and interest, many consumers complete in 36–60 months (it can be shorter or longer).
  • Fees apply: Although regulated and built into the plan, there is a cost to the service and court order.
  • Limited flexibility once the order is granted. Any changes must be managed via your debt counsellor and, if material, via a court/tribunal variation.

How long does debt review take?

There are two timelines to consider:

  1. On-ramp (weeks to a few months): From application to the court or tribunal order. This period includes notifications, negotiations, and legal finalisation.
  2. Repayment horizon (typically years): The duration depends on your balances, negotiated interest rates, and the size of the consolidated instalment. With a realistic budget and occasional windfalls (for example, a tax refund applied as an extra payment), you can finish much sooner than the original terms on your credit agreements.

What happens to your credit score and profile?

  • A debt review flag appears at credit bureaus after your application is accepted and remains until you complete the process and receive a Clearance Certificate.
  • You will not be granted new credit. This is by design to ensure the plan works.
  • Once you receive the Clearance Certificate and the bureaus are updated, the flag is removed. Over time, your profile can recover positively as you maintain clean financial behaviour.

Will I lose my house or car?

Debt review is designed to protect sustainable assets, not to take them away. If your plan includes your home loan or vehicle finance, you must:

  • Keep the restructured instalments up to date.
  • Maintain insurance required by the credit agreement.
  • Communicate immediately with your counsellor about any income changes.

If you default repeatedly on the restructured plan, the credit provider may seek enforcement. Staying current is essential.

Can I cancel or exit early?

  • Before your matter is made a court/tribunal order, you may be able to withdraw with your counsellor’s guidance.
  • After the order, you typically complete by meeting the conditions for a Clearance Certificate (for example, unsecured debts settled and secured debts up to date per the NCA rules).
  • Settling faster than planned is allowed and encouraged. Lump-sum payments can shorten your horizon and reduce total interest.

Debt review vs other options

Debt review is powerful, but it is not the only solution. Compare it with:

  1. Budget reset and direct negotiation
    Create a realistic spending plan and negotiate payment arrangements directly with credit providers. Works best if arrears are small and income is stable.
  2. Debt consolidation loan
    Replace multiple high-interest debts with one new loan at a lower rate. This requires qualifying credit status and enough disposable income. Without discipline, people re-use old credit and end up worse off.
  3. Administration order (Magistrates’ Court)
    A court-driven process for consumers with smaller, qualifying debts. Less common today and more limited than debt review.
  4. Sequestration (insolvency)
    A last resort that surrenders your estate to the court. It writes off a portion of debts but comes with serious consequences for assets, future credit, and costs.
  5. Do nothing
    Not a real option. Arrears grow, legal action escalates, and stress compounds. If you are over-indebted, decisive action protects your future.

Is debt review right for you? (Quick self-check)

Answer yes/no to each:

  • Are your minimum payments more than you can afford after rent, food, transport, and school costs?
  • Are you borrowing to repay borrowing (for example, using one loan or card to service another)?
  • Have you missed payments or incurred frequent penalty fees and collections charges?
  • Would a single, lower consolidated instalment make your budget sustainable?
  • Are you willing to pause new credit and commit to a plan for 24–60 months?
  • Do you have essential assets (home, car) that you want to protect through an orderly arrangement?

If you answered yes to most questions, debt review is likely a good fit. If you answered no to most, try a budget reset and negotiation, or explore a consolidation loan if your score and affordability allow.

Typical example (illustrative only)

Before debt review

  • Personal loan: R120,000 at 20% p.a. → R3,200 p.m.
  • Credit card: R35,000 at 22% p.a. → R1,400 p.m.
  • Store card: R12,000 at 24% p.a. → R600 p.m.
  • Vehicle finance: R240,000 at 13% p.a. → R5,500 p.m.
  • Total instalments: R10,700 p.m. (excluding fees and arrears)

Monthly net income after essentials: R8,900 p.m. → Shortfall of R1,800 p.m.

Under debt review (negotiated scenario)

  • Interest and terms restructured within NCA framework.
  • Single consolidated instalment: ~R8,800 p.m. via PDA (figures illustrative).
  • Collections pressure stops, and the plan is made an order of court.
  • Consumer stays current, applies annual bonus as an extra payment, and finishes 14 months early.

Every case is unique. Your figures will depend on balances, agreed interest, and your budget.

Practical tips for success under debt review

  • Choose a registered debt counsellor with a transparent fee schedule and clear communication.
  • Provide complete documents (ID, payslips, bank statements, credit agreements). Missing information delays your court order.
  • Be honest about expenses. A plan that ignores school fees, travel, or medical costs will not stick.
  • Set a debit order to the PDA for your consolidated instalment immediately after payday.
  • Protect secured assets by keeping insurance current.
  • Use windfalls wisely (tax refunds, bonuses, small inheritances) to settle accounts early.
  • Track statements from the PDA and query anomalies quickly.
  • Build new habits: an emergency fund, cash-based budgeting, and no new credit while under review.

Frequently asked questions

1) Will my employer find out?
Not unless you disclose it or a voluntary payroll deduction is set up with your consent. Debt review is a private legal process.

2) Can I change jobs while under debt review?
Yes. Update your counsellor immediately so your plan and debit orders adjust without missed payments.

3) Can I rent a flat or open a cell phone contract?
Credit providers see the debt review flag and may decline new credit agreements until you receive your Clearance Certificate.

4) What if a credit provider refuses the proposal?
The court can impose a fair rearrangement after hearing both sides. This is why the legal order is important.

5) What is “reckless credit”?
If a lender failed to assess affordability properly or ignored obvious risk, a court may set aside or restructure that specific agreement. Your counsellor screens for this.

6) What if my income drops during the plan?
Inform your counsellor promptly. Your plan may be varied through negotiations and, if necessary, via a court/tribunal application.

7) What happens after I receive my Clearance Certificate?
Your counsellor and the PDA notify the credit bureaus to remove the debt review flag. Maintain good habits to rebuild your score.

Final word

Debt review is not an admission of failure; it is a structured, lawful path to regain control, protect your assets, stop the cycle of arrears, and rebuild your financial credibility. If your budget can no longer carry your instalments and you need a single, affordable payment with legal certainty, debt review is very likely right for you.

If, however, your situation is still manageable with a budget reset or a consolidation loan, weigh those options first. The best choice is the one that you can commit to fully and that gets you to a sustainable, debt-free life as quickly and safely as possible.

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