Debt Review


Introduced by the National Credit Act of 2005, debt review allows credit active consumers in financial difficulties to apply for financial relief and consolidation of their debt into a single reduced monthly payment. By applying to a registered debt counsellor, to be placed under debt review, a consumer gives the debt counsellor authority to negotiate reduced monthly credit instalments with the consumer’s credit providers. The debt review application process is regulated in terms of the National Credit Act of 2005 and affords the consumer protection against legal action by credit providers to collect on accounts that are in arrears.


Debt review also known as debt counselling, is a formal debt relief process established by the National Credit Act (NCA). The process is designed to assist and to protect over-indebted consumers who are struggling to meet their financial obligations and repay their debts. The process aims to provide a structured and manageable repayment plan for individuals, while also protecting them from legal action and asset repossession by creditors.

Here’s how the debt review process generally works:

If you are experiencing financial difficulty, you can apply for debt review through a registered debt counsellor. The debt counsellor will assess your financial situation and determine whether you are over-indebted. The debt counsellor then either rejects the application if you are not over-indebted, or he accepts the application if you are over-indebted.

If you are found to be over-indebted, the debt counsellor will notify the credit providers and the credit bureaux, where a record will be kept. The debt counsellor then negotiates reduced monthly repayment amounts with the creditors and consolidates all your debt into one single monthly payment. 

The debt counsellor then applies to the Magistrates Court for the consolidation of your combined credit to be enforced by a court order. The debt counsellor then has the responsibility to make the agreed reduced monthly repayments from the consolidated monthly payment.

Please click here to see a summary of the latest prescribed fees as provided by the National Credit Regulator (please note all fees exclude VAT).


Debt review fees in South Africa are regulated by Section 86 of the National Credit Act (NCA). Section 86(8) of the NCA authorizes the Minister of Trade and Industry to set the maximum fees that debt counsellors may charge for their services during the debt review process. How the fees are paid is affected by the progression of the debt review process and different fees are due at different times.

Please click here to see a summary of the latest prescribed fees as provided by the National Credit Regulator (please note all fees exclude VAT) – link to PDF

For the latest and most accurate information on these fees, it is advisable to check with the National Credit Regulator (NCR) or refer directly to the relevant sections of the NCA.

  • Overwhelming Debt: When your debt is doing a Godzilla on your finances, and making monthly payments feels like a circus act.
  • Persistent Arrears: If you're in a game of catch-up with multiple debts, and it seems like you're falling behind faster than you can catch up.
  • Multiple Creditors: Handling a bunch of creditors can be like herding cats. If coordinating payments is a tricky dance, that's a sign.
  • Reduced Income: Whether it's a job loss, fewer work hours, or a pay cut – if your income took a hit, it's a red flag.
  • Medical Expenses: Unexpected medical bills can throw a real curveball into your financial plans.
  • Divorce or Separation: Post-divorce, the financial aftermath can be a rollercoaster with split assets and new expenses.
  • Economic Downturn: In tough economic times, job losses and financial struggles become more common.
  • Business Failure: Entrepreneurial ventures not going as planned? Accumulated debts from a business hit? It happens.
  • Legal Actions: If creditors are getting serious with threats of legal actions, it's time to take notice.
  • High Interest Rates: When your debts are burdened with sky-high interest rates, it's like adding insult to injury.
  • Maxed-out Credit: If your credit cards are maxed out, and you're stuck with hefty monthly payments.
  • Collection Agency Calls: If your phone is buzzing more with collection calls than friendly messages, it's a sign of distress.
  • Late Payment Fees: Regular late fees are not just about forgetfulness; they signal financial difficulties.
  • No Emergency Fund: Emergency fund? If that term draws a blank, it might be time to reassess.
  • Rising Living Costs: If the cost of living is rising faster than your income, it's a challenge.
  • Excessive Use of Credit: Relying too heavily on credit for everyday expenses? It's a slippery slope.
  • Limited Financial Knowledge: If financial terms sound like a foreign language, getting some guidance could be beneficial.
  • Repossessions Threats: When your assets are under threat of repossession, that's a serious situation.
  • Fear of Bankruptcy: If bankruptcy scares you, and you're exploring alternatives, we need to talk.
  • Credit Score Decline: A sinking credit score? It's not just a number; it affects future credit opportunities.
  • Stress and Anxiety: If debt-related stress is taking a toll on your mental well-being, it's time to address it.
  • Unforeseen Expenses: Life's surprises can wreak havoc on finances. Let's see how to navigate them.
  • Unemployment: No job and bills piling up? It's a tough spot, and we can work through it.
  • Mounting Loan Balances: When loan balances are growing instead of shrinking, it's a concerning trend.
  • Living Paycheck to Paycheck: Barely making it to the end of the month? Let's figure out a better plan.

Debt review is a significant step, and it's crucial to understand how it aligns with your unique situation. Let's have a chat. I'm here to help you navigate through your options and find the best path forward.

Debt Review

Debt review is tailored to aid individuals grappling with excessive debt by facilitating effective debt management and financial stability. The process aims to establish a structured repayment plan while affording legal protection against creditors.

Pros of Debt Review:Cons of Debt Review:
Legal Safeguard: Debt review shields individuals from legal actions by creditors, preventing lawsuits or asset seizures during the process.Credit Score Impact: Participating in debt review adversely affects credit scores, posing challenges in securing new credit during the process.
Consolidated Payments: Streamlining debts into a single monthly payment enhances financial management and facilitates effective budgeting.Eligibility Criteria: Not everyone qualifies for debt review, necessitating genuine over-indebtedness and a consistent income source.
Negotiated Terms: Debt counselors can negotiate favorable terms with creditors, including reduced interest rates and extended repayment periods..Duration: Debt review's completion may span several years, demanding patience and commitment.
Asset Preservation: Unlike sequestration, debt review does not necessitate surrendering assets.. 

Sequestration (Voluntary Surrender or Bankruptcy):

Sequestration, alternatively termed voluntary surrender or bankruptcy, is a legal avenue through which individuals declare insolvency, regulated by the Insolvency Act. This involves relinquishing a majority of assets to a trustee, who then sells them to settle outstanding debts. The process typically has a defined duration, after which the individual may undergo rehabilitation.

Pros of Sequestration (Voluntary Surrender):Cons of Sequestration (Voluntary Surrender):
Debt Discharge: Sequestration offers substantial debt relief by discharging a significant portion of outstanding debts, providing a fresh financial start.Asset Surrender: Sequestration mandates surrendering a major portion of assets to trustees for sale, impacting financial well-being.
Immediate Relief: Granting immediate respite, sequestration halts creditor harassment and legal actions, alleviating financial pressure.Credit Score Impact: Sequestration severely damages credit scores, making access to credit challenging for an extended period.
Prompt Process: Relative to debt review, sequestration is a swifter process, enabling individuals to commence rebuilding their financial lives upon completion.Restricted Financial Freedom: During sequestration, limitations on acquiring credit and certain professional opportunities may apply.
 Public Disclosure: Sequestration is publicly recorded, potentially influencing personal reputation and life.

Debt Review

Debt review, also known as debt counseling, is a formal debt relief process established by the National Credit Act (NCA) in South Africa. It is designed to help over-indebted consumers manage their debts and achieve financial stability.


Pros of Debt Review:Cons of Debt Review:
Legal Protection: Under debt review, you are legally protected from creditors taking legal action or repossessing your assets while you are under the process.Credit Score Impact: Enrolling in debt review will negatively impact your credit score, which can make it harder to access credit in the future.
Single Payment: Debt review consolidates all your debts into one affordable monthly payment, making it easier to manage your finances.Limited Eligibility: Not everyone qualifies for debt review; you must be over-indebted and have a regular source of income.
Negotiated Interest Rates: Debt counselors can negotiate with creditors to reduce interest rates, potentially saving you money in the long run.Duration: Debt review can take several years to complete, depending on the extent of your debts, so it requires commitment and patience.

Extended Repayment Terms: Debt review often offers extended repayment periods, providing more time to repay your debts and reducing the immediate financial burden.

Structured Plan: You'll have a structured and realistic repayment plan that suits your financial situation and ensures all debts are addressed systematically.

No Additional Credit: While under debt review, you won't be able to access new credit until you've completed the process and obtained a clearance certificate.
Sequestration (Voluntary Surrender or Bankruptcy):

Debt consolidation

Debt consolidation involves taking out a new loan or credit facility to pay off multiple existing debts. This process combines various debts into a single, more manageable debt with a lower interest rate.

Pros of Debt Consolidation:

Cons of Debt Consolidation:

Simplified Repayment: By combining multiple debts into one, debt consolidation simplifies your monthly payments and reduces the risk of missing due dates.Collateral Risk: Some consolidation loans, like home equity loans, are secured against assets, putting them at risk if you default on payments.
Lower Interest Rates: If you can secure a consolidation loan with a lower interest rate than your existing debts, it can lead to significant interest savings.Qualification Criteria: Securing a consolidation loan with favourable terms may require a good credit score and a stable income, making it difficult for some individuals to qualify.
Potential Credit Score Improvement: By making regular payments on the consolidation loan, you may improve your credit score over time.Temptation to Reuse Credit: Paying off existing debts might create the temptation to use those credit lines again, leading to further debt accumulation.
Flexible Options: Debt consolidation can be achieved through various methods, such as personal loans, balance transfer credit cards, or home equity loans.Overall Cost: If the loan term is extended significantly, you may end up paying more interest over time, even with a lower interest rate.

It's important to carefully consider your financial situation and seek advice from a qualified financial advisor or counselor before choosing between debt review and debt consolidation. Each option has its advantages and disadvantages, and what works best for you will depend on your specific circumstances and goals.