What Is Debt Review in South Africa?
Debt review — also known as debt counselling — is a formal legal process introduced by the National Credit Act (NCA) under Section 86. It allows over-indebted South Africans to have their debts restructured by a registered debt counsellor, resulting in a single reduced monthly payment that is affordable based on their actual income and living expenses.
Once you are under debt review:
- All your creditors are legally prohibited from taking action against you — no repossession, no legal summons, no harassment
- Your interest rates are reduced to 0–5% on most accounts
- All your debt repayments are combined into one monthly payment via a Payment Distribution Agency (PDA)
- Your credit record reflects a debt review flag — you cannot apply for new credit during the process
Many people confuse debt review with sequestration (personal insolvency). They are very different. Debt review keeps you in control of your assets and your repayments — you simply pay less per month at lower interest. Sequestration involves the legal surrender of your estate to a trustee. Debt review is the preferred option for most over-indebted South Africans.
Who Qualifies for Debt Review in South Africa?
To qualify for debt review under Section 86 of the NCA, you must meet the following criteria:
- You must be over-indebted — meaning your monthly debt repayments exceed what you can afford after essential living expenses
- You must have a regular income — debt review requires you to make ongoing reduced payments; it is not suitable for those with no income at all
- You must not already be under sequestration, liquidation, or administration
- You must apply before a creditor obtains a court judgment against you for the specific debt — once a judgment is granted, that debt cannot be included in debt review
Timing is critical. If a creditor has already issued a summons or obtained a judgment against you, that specific debt cannot be included in your debt review application. Apply as soon as you realise you are struggling — do not wait for legal letters to arrive.
How Does the Debt Review Process Work? Step-by-Step
Find an NCR-registered debt counsellor via the NCR website at ncr.org.za or by calling 0860 627 627. The initial assessment is free. The counsellor reviews your income, expenses, and all outstanding debts to determine whether you qualify as over-indebted.
You complete and sign Form 16 — the official debt review application. From this moment, you are legally under debt review and creditors are notified. You have 60 business days of protection from legal action while your case is assessed.
Your debt counsellor sends a formal notice to every creditor within 5 business days of your application. Creditors have 5 business days to respond with their account details and outstanding balances.
The counsellor calculates your disposable income after essential living expenses and proposes a restructured repayment plan to all creditors. This plan reduces interest rates to 0–5% and extends repayment terms to make the monthly amount affordable.
If creditors accept the proposal, it is made a consent order. If any creditor objects, the matter goes before a magistrate who has the power to impose a restructuring order. Either way, the outcome is legally binding on all parties.
You make a single monthly payment to an NCR-registered Payment Distribution Agency (PDA). The PDA distributes funds to each creditor according to the court order. You deal with one payment — the PDA handles the rest.
Once all debts included in the review are paid in full, your debt counsellor issues a Form 19 clearance certificate. This is sent to all credit bureaus, your debt review flag is removed, and your credit record begins to recover.
What Does Debt Review Cost in South Africa?
Debt review fees are regulated by the NCR and are structured as follows:
| Fee Type | NCR Maximum (2026) | When Charged |
|---|---|---|
| Application fee | R50 | Once-off, at application |
| Restructuring fee | R8,000 (single) / R9,000 (joint) | First month’s payment — paid via PDA |
| Monthly after-care fee | R450 per month (max) | Ongoing, deducted from monthly PDA payment |
| Legal fee (if court required) | R750 (magistrate’s court) | Once-off, if consent order required |
| PDA fee | 3% of monthly distribution (max R400) | Monthly, deducted from PDA payment |
All debt review fees are deducted from your single monthly PDA payment. You do not pay the debt counsellor separately or upfront. Any debt counsellor who demands large upfront cash payments is operating outside NCR guidelines — report them on 0860 627 627.
How Long Does Debt Review Take in South Africa?
The duration of debt review depends on the total amount of your restructured debt and your monthly payment amount. There is no fixed time limit — you remain under debt review until all included debts are paid in full.
| Debt Level | Typical Duration |
|---|---|
| Light (under R100,000) | 2–4 years |
| Moderate (R100,000–R300,000) | 4–6 years |
| Heavy (R300,000–R600,000) | 6–9 years |
| Severe (above R600,000) | 9–15 years |
You can exit debt review early by paying a lump sum to settle all remaining debts — for example, through an inheritance, retrenchment payout, or property sale. This triggers immediate clearance certificate issuance.
How to Exit Debt Review in South Africa
Exiting debt review correctly is as important as entering it. There are three legitimate exit routes:
1. Complete the Process (Recommended)
Pay all restructured debts in full according to the court order. Your debt counsellor issues a Form 19 clearance certificate, which is sent to all credit bureaus within 5 business days. Your debt review flag is removed and your credit record begins recovering immediately.
2. Early Settlement via Lump Sum
If you come into a lump sum — retrenchment pay, inheritance, or property proceeds — you can settle all remaining debts early. Your counsellor confirms all accounts are paid, issues the clearance certificate, and you exit debt review ahead of schedule.
3. Withdrawal Before Court Order
If your financial situation improves significantly before a court order is granted, you may withdraw from the debt review process using Form 17.4. This is only possible before the magistrate’s court order is made. Once a court order exists, you must complete the process or settle in full.
Stopping your PDA payments does not remove your debt review flag — it simply leaves you unprotected and in arrears. Creditors can then take immediate legal action against you. If you want to exit debt review, follow the formal legal process through your debt counsellor. Never simply stop paying.
Debt Review vs Other Debt Solutions: Which Is Right for You?
| Debt Review | Consolidation Loan | Sequestration | Administration | |
|---|---|---|---|---|
| Requires income? | Yes | Yes | No | Yes |
| Protects assets? | Yes | No | No — surrendered | Partial |
| New credit allowed? | No | Yes | No | No |
| Interest reduced? | Yes — 0–5% | Possibly | Yes — debts written off | Partial |
| Court involvement? | Yes (magistrate) | No | Yes (High Court) | Yes (magistrate) |
| Best for | Over-indebted with income | Manageable debt, good credit | Insolvent, no assets to protect | Debts under R50,000 |
Your Rights Under Debt Review in South Africa
- Right to a free initial assessment — no registered debt counsellor may charge for the initial consultation
- Right to legal protection from creditors — once Form 16 is submitted, creditors cannot take legal action against you
- Right to a regulated fee structure — all fees are NCR-capped and deducted from your PDA payment
- Right to a clearance certificate — once all debts are paid, your counsellor must issue Form 19 promptly
- Right to change debt counsellors — if your counsellor is unresponsive or non-compliant, you can apply to the NCR to transfer your case
- Right to complain — report non-compliant debt counsellors to the NCR on 0860 627 627
Frequently Asked Questions
Struggling With Debt? Get a Free Assessment.
Find out if debt review is the right solution for your situation — speak to an NCR-registered debt counsellor today. The initial assessment is always free.
Final Thoughts
Debt review is not a sign of failure — it is a legal right designed specifically to protect South Africans who are genuinely over-indebted. Used correctly, it can reduce your monthly payments by 30–50%, slash your interest rates to near zero, and protect your home and vehicle while you work your way out of debt.
The key is to act early, use a registered debt counsellor, understand the full process before you sign anything, and commit to the monthly payments for the duration. Debt review only works if you work with it.
If you are unsure whether you qualify or need impartial guidance, call the NCR Consumer Line on 0860 627 627 — free of charge, any business day.
