Is Debt Review in South Africa The Right Choice? | A 2025 Guide

By Princella Esther Agyei Certified Credit Counselor & HR Manager, HR People Associates
There is a formal, legal process designed to protect you and help you regain control: Debt Review in South Africa.

Feeling like you’re drowning in monthly payments? Juggling calls from creditors? For millions of South Africans, this financial pressure is a daily reality. When your debt becomes unmanageable, it can feel like there’s no way out.

While the idea can be intimidating, understanding how it works is the first step toward financial relief. This guide will walk you through everything you need to know about the Debt Review process in South Africa for 2025.

What Exactly is Debt Review?

Debt Review, also known as debt counselling, is a legal process established by the National Credit Act (NCA) of 2007. It is not a loan and it is not a way to avoid paying your debts. Instead, it is a structured program where a registered Debt Counsellor assesses your financial situation and negotiates with your creditors on your behalf to create a new, affordable repayment plan.

The primary goal is to help over-indebted consumers manage their finances without losing their assets, like their home or car.

The Step-by-Step Debt Review Process in 2025

The journey is systematic and regulated. Here’s what you can expect:

1. Application: You approach a Debt Counsellor registered with the National Credit Regulator (NCR). They will conduct a full financial assessment, looking at your income, expenses, and debt obligations.
2. Declaration of Over-Indebtedness: If the Debt Counsellor determines you are “over-indebted” (meaning you cannot afford to meet your monthly debt payments), they will formally declare this.
3. Notifying Creditors (Form 17.1 & 17.2): Within 5 business days, your Debt Counsellor notifies all your creditors and the credit bureaus that you have applied for debt review. This provides immediate legal protection, stopping creditors from taking legal action against you for 60 business days.
4. Debt Restructuring & Negotiation: Your counsellor creates a new, affordable monthly budget for you. They then use this to propose a restructured payment plan to your creditors, often involving lower interest rates and extended payment terms.
5. The Court Order: Once a repayment plan is accepted by your creditors, your Debt Counsellor will apply to the Magistrate’s Court to have it made a formal court order. This makes the new plan legally binding on you and your creditors, protecting you for the entire duration of the process.
6. The Clearance Certificate: You make your single, affordable monthly payment to a Payment Distribution Agency (PDA), who then distributes the funds to your creditors as per the court order. Once all the debts included in the plan are fully paid off, your Debt Counsellor will issue you a Clearance Certificate and notify the credit bureaus to remove the debt review flag from your name.

The Pros vs. Cons of Debt Review: An Honest Look

It’s crucial to weigh the benefits against the drawbacks.

Pros:

• Immediate Protection: Creditors can no longer harass you or take legal action.
• Asset Protection: It helps prevent the repossession of your home and vehicle.
• Simplified Payments: You make one single affordable payment each month.
• Financial Breathing Room: Lower monthly payments free up cash for essential living expenses.

Cons:

• No New Credit: You cannot apply for any new credit (loans, store cards, etc.) while under debt review.
• Credit Record Flag: Your credit report will be flagged, indicating you are under review. This flag is only removed upon completion.
• It Takes Time: The process is not a quick fix; it can take several years to complete depending on your level of debt.

Is Debt Review Right for You?

If you are consistently unable to meet your monthly debt obligations and are facing legal action from creditors, debt review is a powerful and viable solution. The key is to act quickly and work with a reputable, NCR-registered Debt Counsellor.

Don’t let debt control your life. Explore your options, understand the process, and take the first step toward financial freedom.