Debt Restruct

A Beginner’s Guide to Debt Review

group of people ready for the debt review beginners guide

The National Credit Act (NCA) was passed by the government of South Africa over a decade ago. The NCA describes various aspects of granting credit, who is qualified to give credit and possible resolutions for individuals who cannot repay their debts. Section 86 of the NCA specifically addresses the process of debt review (debt counselling) offered by professional debt counsellors in South Africa.

Any person claiming to be a debt counsellor must be registered with the NCR (National Credit Regulator). The NCR is similar to a watchdog agency that oversees the debt counselling industry to ensure they are following guidelines established by the NCA.

When Should You Seek Debt Review in South Africa?

Our recently published article 10 Signs You Need Debt Help goes over a few early signals of looming debt problems in detail. 

Alternatively, here’s a  shortlist of reasons to consider debt review:

  • You have been trying to pay on multiple outstanding debts for more than six months but your current income is not covering payments
  • You are receiving numerous calls from creditors daily
  • Creditors are threatening you with legal action
  • You see no way out from under your debt

Another way to determine if you are financially stressed is to perform a debt-to-income ratio calculation. Just take your monthly debt, divide that number by your gross income and you will have your debt-to-income ratio.

Example: Joe’s monthly debt (loans, credit card payments, etc) is R30692.260. His gross monthly income is R38365.325. Dividing these two numbers results in 80%. Anything over 60% is considered “over-indebted”. A ratio of 0% to 40% indicates an acceptable debt-to-income ratio.

In some cases, you may be tempted to use a debt consolidation loan as a solution to your growing financial struggle. However, this is a troublesome approach that attempts to fight debt with even more debt and most South Africans should be advised to think carefully before considering consolidation over counselling.


What is Debt review?

The debt review process seems complicated to a large number of South Africans and there is a common thread of frequently asked questions about debt counselling – the most popular being “What is debt review?”.

Debt review under the National Credit Act applies to unlimited debt amounts and does not look at credit scores. If you have a monthly income that enables you to make acceptable offers to creditors, you are eligible to apply for debt review.

Steps to take before you can qualify for debt counselling/debt review include:

  • Obtain a magistrate court order declaring you are unable to repay debts
  • Prove you are a South African citizen by providing an ID
  • Married couples must show one of them have a steady income


After qualifying for debt review, a debt counsellor registered with the NCR will contact you to discuss your debt problems and recommend how to solve the problems that you discuss.

To get a thorough understanding of your financial situation you will be asked to complete Form 16, the “Application by Consumer for Debt Review”. Form 16 asks for details about your finances, income and debt situation so your debt counsellor can efficiently assess your finances.

Check to see if you qualify to reduce your debt instalment with our quick quiz

What Happens After Debt Review?

If your debt counsellor accepts your debt review case, they will begin calling your creditors to make offers in compromise. Creditors are under no obligation to accept a repayment proposal from debt counsellors. However, most creditors simply want to receive some type of payment or resolution for an outstanding debt.

Creditors can initiate counter-proposals to proposals submitted by a debt counsellor. They typically want a different repayment or resolution plan involving more money if they offer a counter-proposal. Your debt counsellor will either discuss the counter-proposal with you or inform the creditor their offer is not doable due to insufficient income.


What are the Benefits of Debt Counselling in South Africa?

Like all things, there are pros and cons to debt review. Ultimately, the benefits outweigh the “drawbacks” when it comes to overcoming debt. Here are some of the advantages:

  • Cannot have their assets targeted legally by creditors. As soon as a debt counsellor starts working on your case, your assets are protected from creditors trying to take them in court
  • Will have only one payment per month to make under a fixed repayment plan. The amount of that payment remains the same until the debt is erased
  • Will not have to pay exorbitant amounts of interest on loans. Interest amounts accrued from debt are secured and limited due to provision of an extension while making payments
  • Will enjoy peace of mind knowing that they will eventually be debt-free with as little damage to their credit as possible
  • Are never forced to pay more than they can afford. Repayment plans are designed to ensure your basic daily needs are met


Once your debt repayment plan is established with creditors, you should not miss one payment or you could risk losing immunity against legal proceedings. Missing payments may give creditors the ability to come after assets other than your vehicle or home. If you start having trouble making monthly payments because of job loss, serious health problems or other emergency, contact your debt counsellor immediately.

Hopefully, you enjoyed this brief guide to debt review and the debt counselling process. Now that you’re familiar with some of the benefits you might be wondering how to apply.

Try our free debt assessment quiz to see if you’re eligible for debt review.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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