If you’re feeling overwhelmed by monthly repayments and struggling to keep up, debt review could be the solution that gives you legal protection and a structured way to regain control of your finances. Introduced under the National Credit Act (NCA), debt review is a formal process designed to help over-indebted consumers repay their debts in an affordable and manageable way.
Here’s a simple step-by-step guide to how the debt review process works in South Africa:
Step 1: Apply for Debt Review
The process begins when you apply with a registered debt counsellor. You’ll need to provide details about your income, monthly expenses, and outstanding debts. This allows the counsellor to assess your financial situation properly.
Step 2: Assessment of Over-Indebtedness
Your debt counsellor will evaluate whether you are officially over-indebted according to the NCA guidelines. This means determining whether your income is insufficient to cover your monthly debt repayments after essential living expenses.
If you qualify, the counsellor will notify your credit providers and credit bureaus that you have applied for debt review. From this point, your creditors may not take legal action against you (provided you continue making payments as arranged).
Step 3: Proposal to Creditors
Next, your debt counsellor restructures your debt into one affordable monthly repayment. A repayment proposal is sent to your creditors, often requesting reduced instalments and extended repayment terms.
The goal is to ensure:
- You can afford your monthly repayment
- Creditors receive consistent payments
- You avoid legal action or asset repossession
Step 4: Court or Tribunal Approval
The repayment plan is then submitted to court or the National Consumer Tribunal for approval. Once granted, it becomes a legally binding court order. This protects you from creditor harassment and ensures the new repayment terms are enforced.
Step 5: Make One Monthly Payment
You’ll make a single monthly payment to a Payment Distribution Agency (PDA), which distributes funds to your creditors according to the court-approved plan. This simplifies your finances and reduces stress.
Step 6: Completion and Clearance Certificate
Once all debts (excluding your home loan, if applicable) are paid in full, your debt counsellor issues a clearance certificate. Your credit profile is then updated, and you are officially released from debt review.
Final Thoughts
Debt review is not a quick fix — it’s a structured, legal solution designed to help you regain financial stability. If managed correctly, it can protect your assets, reduce stress, and provide a clear path toward becoming debt-free.
If you’re unsure whether you qualify, speaking to a registered debt counsellor is the first step toward financial relief.
