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What Is Debt Review and How Can It Help You?

Debt review, also known as debt counselling, is a process designed to assist individuals in South Africa who are struggling with debt. Debt review is a formal legal process regulated by the National Credit Act, intended to help over-indebted consumers by restructuring their debt and negotiating with creditors on their behalf to make debt repayments more manageable. A new affordable monthly budget and a payment plan will be drawn up by the debt counsellor, showing a clear picture of your household spending vs. your income and a detailed plan on how you will pay up your debt commitments. A debt counsellor then approaches your credit providers on your behalf with a manageable monthly payment plan to be paid within 60 months (maximum).

It is important to note that the household debt to income ratio in South Africa is amongst the highest in the world at approximately 72%. This means that, on average, 72% of the monthly take-home pay that South African households earn goes towards paying the debt. Debt review  was introduced in South Africa as a formal legal debt relief measure under the National Credit Act (NCA) 34 of 2005 to then assist over-indebted consumers by applying for debt review and also to identify and profile cases of reckless lending with the aim to get the cases suspended.

Here's a general outline of how the debt review process works:

what is the Debt review process?

  1. Application: The consumer applies for debt review with a registered debt counsellor. A consumer approaches a Debt Counsellor and completes a Form 16 application form for debt review. The Debt Counsellor informs the credit providers that you have applied for debt review through Form 17.1.

  2. Financial Assessment: The debt counsellor assesses the consumer's financial situation to determine if they are over-indebted. Credit providers furnish the Debt Counsellor with certificate of balances of the consumers’ debt commitments. The Debt Counsellor completes a financial assessment of your situation using the certificate of balances.

  3. Notification: If over-indebtedness is found, the debt counsellor will notify the credit bureaus and the consumer's creditors that the consumer is under debt review. Debt Counsellor informs the credit bureaus through the National Credit Regulator Debt Help System (DHS) by sending Form 17.2 advising them that you are over-indebted.

  4. Repayment Plan: The debt counsellor then draws up a restructured monthly budget and repayment plan and negotiates with creditors on behalf of the consumer for reduced payments. Within 30 days of your application, the debt counsellor submits a suitable repayment plan. If accepted by credit providers, the consumer will start paying in line with the negotiated payment plan.

  5. Court Order: Once all parties agree to the repayment plan, it can be made an order of the court. This provides legal protection to the consumer and ensures that the terms of the agreement are adhered to. The Debt Counsellor will approach the courts on behalf of the consumer to obtain a debt review court order which makes binding the rearranged payment plan.

  6. Payment: The consumer makes regular payments as per the restructured plan. These payments are usually managed by a Payment Distribution Agency, which distributes the payments to the creditors as per the plan.

  7. Completion: Once all the debt has been repaid, the debt counsellor issues a clearance certificate, and the consumer is declared not over-indebted. Once you have finished paying off your debt, the Debt counsellor issues a Form 19. This is known as a clearance certificate issued to a consumer after he/ she has satisfied all obligations under every credit agreement. At this stage, all the other debts that are paid up (excerpt a mortgage bond which takes 20 years or so to pay off) that were subject to a debt review court order, the consumer is removed from debt review.

Here's a general outline of the benefits derived from debt review:

what are the Benefits of debt review?

money habits improve

This is arguably one of the most important benefits of debt review compared with any other form of debt relief e.g. debt consolidation. Listen closely, most of the time, after someone consolidates their debt, the debt grows back. Why? They don’t have a game plan to pay cash and spend less. In other words, they haven’t established good money habits for staying out of debt and building wealth. Their behaviour hasn’t changed, so it’s extremely likely they will go right back into debt. But debt review on the other hand targets behavioural change with money. You learn to pay cash on all purchases and spend less. It stops one from borrowing and focuses on debt elimination. Personal finances are 80% about behaviour and 20% is knowledge.

 Click here to learn more about the difference between a debt consolidation loan and debt review.


What do l mean by this? I am glad you asked. Listen closely, at Debt Sage we do not hold back any of our clients. Should you run into some money i.e. inheritance from the rich aunt and you want to pay off all your accounts and be off debt review, yes you can. In fact, we encourage our clients to pay extra when they can so that they can come off debt review as quickly as possible and realize their financial goals ( buying that dream house).  Yes, it's possible and we have helped many realize their dreams click to read here ​​​​what our clients say.

legal protection of assets

Your assets are protected while under debt review. The consumer's assets, like their home and car, are protected from repossession. This is one of the most important benefits of debt review. When the debt counsellor approaches the courts to obtain a court order,  the rearranged plan is made an order of the court. This means that credit providers are agreeable to the rearranged plan and your assets are protected. Creditors cannot take legal action against a consumer once the debt review process has started and before the debt has been settled, provided the consumer follows the repayment plan.

Consolidated simplified payments

Consumers make one consolidated payment that is distributed to all creditors, which simplifies their finances.

reduced Interest rates

The debt counsellor will negotiate reduced interest rates on your debt commitments. The savings from reduced interest rates reduce your total obligations.

Affordable Monthly Payments

You pay one reduced monthly manageable amount that pays all your accounts.

Temporary Flag

There is no permanent record of having applied for debt review once the Debt Counsellor removes you from debt review.

To learn more on the benefits of debt review click here:  the benefits of debt review.

However, while under debt review, consumers are not allowed to incur any further credit, and the fact that they are under debt review will be recorded with credit bureaus. Once the process is complete and all debts are settled, the debt review status should be removed from the consumer’s credit profile.

How Long Will Debt Review Last?

Typically, the debt review process can last between 3 and 5 years, but this is not a fixed period. Some individuals can be under debt review for a shorter period if they have a relatively small amount of debt or if they come into additional money (like an inheritance or a bonus at work) that they can use to settle their debts sooner. Conversely, if the debt amount is substantial, the period could be longer.

The length of time that debt review lasts is not one-size-fits-all; it varies from person to person based on several factors, including:

  1. Amount of Debt: The more debt you have, the longer it may take to pay it off, even with renegotiated terms.

  2. Income and Expenses: If you have a stable income and can allocate a reasonable amount of your income to debt repayment after essential expenses, you may be able to complete the process faster.

  3. Interest Rates and Charges: The interest rates and charges that your debt counsellor can negotiate with your creditors will affect the duration of the debt review process. Reduced interest rates can result in a shorter debt review period.

  4. Adherence to the Payment Plan: How strictly you adhere to the revised payment plan will impact the duration. Missing payments can extend the process.

Once a consumer completes the process, the debt counsellor will issue a clearance certificate indicating that the consumer has satisfied all the requirements under the debt review and is no longer over-indebted. This certificate is then sent to all credit bureaus and creditors to remove the debt review status from the consumer's credit profile.

To conclude generally most debt review clients within 3-5 years are debt-free and issued with a Form 19 to exit debt review. How long will one be on debt review will depend on several factors which include how much debt one owes, and how much one can afford to repay every month towards the debt among other factors. It is important to note that, the more one pays towards their debt when they can, the sooner they will be able to exit debt review.  Debt review is very flexible in accommodating additional payments so that one pays their debt quicker. At Debt Sage we encourage our clients to be aggressive towards paying off their debt so that they become debt-free fast and start creating wealth.

Do you need debt review?

The process has proven to be a useful mechanism for those unable to meet their debt obligations, giving them a chance to regain financial stability without resorting to more drastic measures like insolvency or bankruptcy. If you are really stretched and struggling to service your debt every month, it can be hard to know where to turn. We are available to help you find help in a way that’s best for you. We will guide you through the entire debt review process and help you deal with your debts and become debt-free.


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