How Debt Counselling Works in South Africa

“Debt counselling” and “debt review” refer to the same formal process in South Africa — a legally regulated route under the National Credit Act (NCA), overseen by the National Credit Regulator (NCR), for consumers who are over-indebted. Knowing the actual shape of the process makes it much easier to decide whether it's right for you.

Step 1: You apply, in terms of section 86

A consumer who is struggling to pay their credit agreements applies for debt review under section 86 of the NCA. This is something you apply for — it isn't applied to you without your involvement.

Step 2: The debt counsellor has 30 business days to make a determination

The regulations give a debt counsellor 30 business days from receiving your application to determine whether you are over-indebted, or not yet over-indebted but likely to struggle to meet your obligations in time. They review your income, expenses and everything you owe to reach that determination.

An important nuance that's often misunderstood: the debt counsellor does not “declare” you over-indebted. They make a determination and refer it, with a proposal for how your debt could be restructured.

Step 3: A court declares over-indebtedness and grants the relief

It is the court that conducts a hearing, formally declares a consumer over-indebted, and grants debt relief by restructuring the credit agreement debt. This is why debt review carries real legal weight — and also why it follows a defined process rather than an instant fix.

Under section 79 of the NCA, over-indebtedness isn't only about being unable to pay right now; it also covers a future or imminent inability to meet your obligations.

Everyone involved must act in good faith

The NCA requires all parties to the debt review process — you, your credit providers, and the debt counsellor — to participate in good faith. Credit providers are not automatically obliged to accept a proposed plan, which is part of why the court route matters.

What protection you actually get

While you are under formal debt review and complying with your restructured plan, credit providers are restricted from taking further legal action on the debts covered by it. That protection is specific to formal debt review — it does not apply to informal debt mediation.

How it ends

Once you have satisfied all the obligations under every credit agreement covered by the re-arrangement, a debt counsellor issues a clearance certificate in terms of section 71. Its effect matters: the detail of the debt review is then expunged from the credit bureaus' records. Long-term agreements such as a mortgage bond are treated differently — section 71 allows an exit once the shorter-term restructured debts are settled, even where a bond is still being paid.

What it isn't

Debt review is not a new loan or a consolidation loan — you aren't borrowing more money, you're changing the terms of what you already owe. It also doesn't guarantee a specific lower interest rate or instalment; what changes depends on what's agreed or ordered.