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About 10 million South Africans are currently over-indebted — spending more on debt repayments than they can sustainably afford. If you are drowning in multiple loan repayments, debt review might be the most powerful tool available to you under South African law. It is not the same as going insolvent. It is a legal breathing space that restructures what you owe into something you can actually manage.
This guide explains exactly how debt review works, who it is for, what it costs, and how to get out the other side with your financial life intact.
What Is Debt Review Under the National Credit Act?
Debt review is a formal debt relief mechanism created by the National Credit Act of 2005. When you apply, a registered debt counsellor assesses whether you are over-indebted. If you qualify, they negotiate with your creditors on your behalf to reduce your monthly payments to an affordable level.
The result is a single consolidated monthly payment managed by a Payment Distribution Agency, which distributes the money to your creditors. Critically, once you are under debt review, creditors cannot take legal action against you for the included debts. That legal protection is one of debt review's most important features for people facing summonses or repossession threats.
How the Debt Review Process Works Step by Step
The process begins with applying to a registered NCR debt counsellor. They request your credit agreements, bank statements, and payslips, then run an over-indebtedness assessment. If you qualify, they notify your creditors within 5 business days and begin negotiations.
| Stage | Timeframe | What Happens |
|---|---|---|
| Application and assessment | 1 to 2 weeks | Counsellor reviews all debts and income |
| Creditor notification | 5 business days | All creditors informed you are under review |
| Negotiation | 4 to 8 weeks | Reduced payment terms negotiated |
| Court order | 2 to 4 months | Magistrate court approves the plan |
| Repayment | 2 to 5 years | Monthly consolidated payment to PDA |
| Clearance certificate | On completion | Debt review flag removed from credit record |
💡 Only use an NCR-registered debt counsellor. You can verify registration at ncr.org.za. Unregistered debt help companies sometimes collect fees without delivering the legal protections of formal debt review.
What Debt Review Actually Costs
Debt counsellor fees are regulated by the NCR and cannot exceed the following caps. These fees are typically absorbed into your monthly consolidated payment — you do not pay them separately upfront.
| Fee | Amount excluding VAT | When Charged |
|---|---|---|
| Application fee | R300 | Once at application |
| Restructuring fee | R8,000 maximum | Spread over first few months |
| Monthly aftercare | Lesser of 5% or R450 | Every month during review |
| PDA fee | Regulated separately | Included in distribution |
⚠️ Debt review suspends your ability to apply for new credit for the duration of the process. This means no new car finance, home loan, or store accounts. If you are planning a major purchase in the next 2 to 3 years, consider whether debt review fits your timeline.
How Debt Review Affects Your Credit Record
When you enter debt review, your credit record is flagged with a debt review status. Any credit check by a bank, retailer, or landlord will show that you are currently under debt review. During this period, you cannot take on new credit.
Once you receive your clearance certificate, the debt review flag is removed and you can start rebuilding your credit record. Your credit score will actually reflect the years of consistent payments made through the debt review plan, which is positive payment history. Many consumers find their credit profile improves significantly after completing debt review.
Getting Out of Debt Review: The Clearance Certificate
The exit from debt review happens when you complete all payments and your debt counsellor issues a Form 19 clearance certificate, or when you pay off all debts early. Once issued, the NCR removes the debt review flag from your credit record and you are free to apply for credit again.
The clearance certificate is not automatic — your debt counsellor must apply for it on your behalf. As you approach the end of your plan, proactively request your clearance certificate timeline. Check your credit record 30 days after receiving it to confirm the flag has been removed.
Debt Review vs Debt Consolidation: Key Differences
Debt consolidation combines multiple debts into one new loan at a lower interest rate. It does not provide legal protection from creditors and does not restrict your ability to take on new credit. If you miss a consolidation payment, creditors can immediately pursue legal action.
Debt review is a formal legal process providing court-approved protection. It is more restrictive but offers stronger protection. Consolidation is appropriate when you can manage your debt but want simpler payments. Debt review is appropriate when you genuinely cannot meet your current obligations.
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Once you've applied for debt review and your debt counsellor has notified your creditors, you have significant legal protections. Creditors cannot take legal action against you for any debt included in your debt review plan while you are complying with payments. This means no summonses, no judgements, no repossessions — for as long as you maintain your monthly consolidated payment.
You also have the right to a transparent process. Your debt counsellor must provide you with a monthly statement showing how your payment was distributed across creditors. You can request a full breakdown at any time. The NCR's online portal (ncrdebthelp.co.za) allows you to verify that your debt counsellor is registered and in good standing.
What you cannot do while under debt review: take on any new credit. This is a hard restriction. No store cards, no personal loans, no vehicle finance, no overdraft increases. Any new credit agreement entered into during debt review is void and both you and the credit provider could face NCR penalties. This restriction is enforced by all registered credit bureaux who flag your profile as under review.
💡 If a credit provider contacts you directly after your debt review application has been lodged, direct them to your debt counsellor immediately. They should not be negotiating with you directly once the formal process has started. Keep records of any direct contact attempts.
Debt Review vs Debt Consolidation: An Important Distinction
These two terms are often confused — and the confusion is sometimes exploited by predatory lenders. Debt consolidation is a new loan that pays off your existing debts, replacing multiple payments with one. It is NOT a legal protection mechanism — creditors can still take action against you, and you're taking on a new debt obligation, often at a higher total cost.
Debt review is a formal legal process under the National Credit Act that restructures your existing debts without new credit, provides legal protection from creditor action, and is overseen by a registered debt counsellor and the courts. It costs a regulated, capped fee. Debt consolidation is a commercial product. Debt review is a legal remedy.
Be very cautious of companies offering 'debt consolidation loans' to people who are over-indebted. In many cases, the new loan carries high initiation fees, credit life insurance markups, and interest that makes the total repayment significantly higher than the original debts combined. If you're genuinely over-indebted, formal debt review under the NCA is almost always the better option.
How Debt Review Affects Your Credit Score
Being under debt review is reflected on your credit profile at all four major South African credit bureaux — TransUnion, Experian, XDS, and Compuscan. The flag indicates you are currently in a formal debt restructuring process. This is not a judgement or blacklisting — it's a factual status indicator. But it does mean every credit application you make while under review will be declined.
Once you receive your clearance certificate and your debt counsellor notifies the NCR, the bureaux are required to remove the debt review flag within 21 business days. After removal, you can begin rebuilding your credit score. Your starting point depends on whether you had any defaults or judgements before entering review — these have their own removal timelines (defaults: 1 year after payment; judgements: 5 years or rescission by the court).
The best post-debt-review credit rebuilding strategy: open a single credit card with a low limit at your bank, use it for one small recurring expense (a monthly subscription), and pay it in full every month. This creates a clean, consistent payment history that bureaux score positively. Within 12–18 months of disciplined behaviour, your score can recover enough to qualify for vehicle finance and eventually a home loan.
Frequently Asked Questions
Debt review is a formal debt relief process under the National Credit Act. A registered debt counsellor assesses your finances, negotiates reduced repayments with your creditors, and structures a court-approved payment plan. You make one consolidated payment monthly and are protected from legal action while under review.
You qualify if you are over-indebted — meaning your monthly income is insufficient to meet all your debt obligations and living expenses. You must be a South African resident with a valid ID, have at least one credit agreement with a registered credit provider, and have a regular income source.
Debt review typically takes 3 to 5 years depending on your debt load and negotiated repayment plan. Some consumers with smaller debts complete the process in 2 to 3 years. The process ends when all debts are paid off and you receive a clearance certificate.
You cannot be blacklisted for the debts included in your plan while you are complying with it. However, your credit profile will reflect that you are under debt review, which means you cannot access new credit during this period.
Debt counsellor fees are regulated by the NCR. The restructuring fee is capped at R8,000 plus VAT, and the monthly aftercare fee is capped at the lesser of 5% of your monthly distribution or R450 plus VAT. These fees are included in your monthly consolidated payment.
Yes. If you pay off all your debts, you exit automatically and receive a clearance certificate. If your financial situation improves significantly, you can apply to exit through the court. Simply stopping payments is not a valid exit.
Debt review is individual — it only applies to your own credit agreements. If you and your spouse have joint credit agreements, those are included. Your spouse's individual credit agreements are unaffected unless they also apply for debt review.
A clearance certificate is issued by your debt counsellor when all debts under your review plan are fully paid. This removes the debt review flag from your credit record and allows you to apply for credit again.
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