Frequently Asked Questions

Debt Counselling, also known as debt review, is a debt relief measure in South Africa and is a formal legal process that provides for a consumer that is over-indebted to get out of debt.  The Debt Counsellor to negotiate a restructured repayment plan and obtain a court order confirming the new repayment plan.

The process is ideal for South Africans with an income - who are struggling to make ends meet.  Particularly for those falling further into debt and cannot keep up with monthly debt repayments.  Debt review is safer and more effective than consolidation loans, which often end up being short-term solutions or get consumers further into debt.

To qualify for Debt Counselling, you must be employed and earn a regular income.  You need to be deemed over-indebted and meet certain criteria set out by the National Credit Act.  Your Debt Counsellor will do the assessment to determine same.

Contact us, complete our application and send the supporting documents to us.  Your information remains confidential.

The National Credit Regulator (NCR) was established by the National Credit Act, 2005 (Act No. 34 of 2005). The NCR is responsible for the regulation of the South African credit industry. The Debt Counsellor must be registered with the National Credit Regulator and have an NCRDC number.

The NCA introduced Debt Counselling as a debt relief measure to help over-indebted South Africans get out of debt. The process prevents consumers from being backlisted as well as other consequences that come with being over-indebted. By law, all Debt Counsellors must be registered with the NCR. NCR registered debt counselling companies must adhere to the following requirements to ensure your consumer rights:-

They must follow all laws and advice put in place by the National Credit Act;
They must be 100% ethical;
They must stick to the fee structure put in place by the National Credit Regulator.

Consumers who are struggling to pay off their debt while making ends meet can apply for debt counselling and will receive:-

A personalized affordable monthly budget;
Restructuring of debts into one affordable monthly payment;
Legal protection over your assets;
Someone taking over all communication with your creditors.

To promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information;
to promote black economic empowerment and ownership within the consumer credit industry;
to prohibit certain unfair credit and credit-marketing practices;
to promote responsible credit granting and use and for that purpose to prohibit reckless credit granting;
to provide for debt re-organization in cases of over-indebtedness;
to regulate credit information;
to provide for registration of credit bureau, credit providers and debt counselling services;
to establish national norms and standards relating to consumer credit;
to promote a consistent enforcement framework relating to consumer credit;
to establish the National Credit Regulator and the National Consumer Tribunal;
to repeal the Usury Act, 1968, and the Credit Agreements Act, 1980; and
to provide for related incidental matters.

When a business is unable to pay its debts, it is usually placed in liquidation.  The assets of the business will be sold on a public auction.

Persons who are no longer able to pay their debt and their debt is spiraling out of control or their liabilities exceed their assets. Surrendering of your estate in terms of the insolvency law entails an application in the High Court. You could lose some or all your assets.

If you fall behind with your account payments and fail to respond to reminder letters then the credit/service provider may apply for a court judgment.  A judgment is granted when a court gives you the instruction to pay the outstanding account.  A judgment remains on your credit report for 5 years OR until it is Paid In Full.

If you fail to pay an outstanding account, the credit/service provider can take legal action in the form of a notice against you.  Notices include administration orders, provisional sequestration, sequestrations and rehabilitation orders. Administration orders remain on your credit report for 5 years, rehabilitation orders remain for 5 years and sequestration orders remain for 5 years if no rehabilitation order is granted.

This relates to late payment or non-payment of your account/s, where the credit/service provider enforces their rights by acting against you. A default will remain on your credit report for 1 year. Paid up defaults are removed once confirmation of paid-up status is received from the credit/service provider.

You apply for Debt Counselling by completing an application for (Form 16).  Thereafter can you print, sign and e-mail the application to us together with your supporting documents.  We will then proceed with the process.

You must earn an income for us to be able to assist you.  If you have been retrenched, you may contact us and let us discuss your situation.

When the consumer’s financial position improves, which it will, if he/she upholds their restructured repayment agreement, and gives his full co-operation to us, a clearance certificate will be issued by our Debt Counsellor and will also inform the credit bureaus to remove the flag and expunge all information relating to consumer’s debts which were under debt counselling.

A credit bureau will place a debt counselling flag on the consumer’s credit profile.  This flag is not a negative listing or “Backlisting” as mostly referred to, it is just an indicator that the consumer is under Debt Counselling.

Yes, the creditor can reject the repayment proposal, although they are likely to accept a reasonable and fair offer.  Should they reject the proposal, a Magistrates Order will need to be obtained.  This is included in the debt counselling process.

All information that you provide to us as private and confidential, and we will never contact you at work unless asked to do so.  We will not inform your employer.

No, there is a restructuring plan in place.  The consumer must contact the Debt Counsellor to make the arrangement.

You will be issued with a legal document to this effect from the Debt Counsellor.

It is already a Court Order and only a Court can make a change to the Court Order.

Yes.  The creditors cannot take legal action for 60 business days after you apply for debt review, but you must continue to make payments because if your application is unsuccessful, you will be in default and the creditors can take legal action after those 60 business days.

The moment you are no longer in arrears and have paid off short term debt excluding your bond.  The Debt Counsellor will issue you with a clearance certificate and communicate with all credit bureaus to remove the debt counselling flag and expunge all information relating to your debts which were under debt review.

You will not be blacklisted.  However, should the Debt Counsellor find the consumer to be over-indebted, they will add a flag to the consumer’s credit record asking creditors not to lend the consumers money because he or she is already over-indebted.  This will be removed once the debt has been repaid and when the consumer is no longer over-indebted.

You will be allocated a Payment Distribution Agency (PDA) where you will make a reduced affordable single payment each month.  The PDA will ensure that the correct amount is paid to all your credit providers on a monthly basis.  We monitor these payments on a monthly basis to ensure a smooth ongoing process and that your creditors get their money.  Do not pay any Debt Counsellor any fees.  All funds must be paid to the PDA.

A consumer may withdraw from the process before being declared over-indebted;

After being declared over-indebted, but before an Order of the Court as been obtained, the consumer would have to demonstrate to the court that they are no longer over-indebted and not in need of debt review;

Should the Court Order have been granted, the consumer cannot withdraw until a Clearance Certificate has been issued by the Debt Counsellor.