Introduction: Why Debt Review Matters More Than Ever

If you're reading this, chances are you're feeling the squeeze that so many South Africans experience every month. You're not alone. In fact, the numbers tell a story that affects millions of families across our country.

According to the latest data from the National Credit Regulator (NCR), as of March 2025, credit bureaus held records for 28.90 million credit-active consumers in South Africa. Of these, a staggering 10.41 million consumers have impaired credit records—meaning they're three months or more behind on payments, under debt review, or have judgments against them. That's more than a third of all credit-active South Africans struggling with debt.

The household debt-to-disposable income ratio currently sits at 62.7%, which means the average South African household is spending nearly two-thirds of what they earn just to service their debt. When you combine this with an unemployment rate of 33.2% and the reality that 43% of adults used credit to buy food in 2024, the picture becomes clear: debt isn't just a financial inconvenience—it's a survival issue.

This is where debt review comes in. Also known as debt counselling, this legal process was created under the National Credit Act to provide a structured path to debt freedom while protecting your assets from repossession. Let's explore exactly how it works and whether it's the right solution for you.

What Is Debt Review and How Does It Differ From Other Options?

Debt review is a formal, legal process established under the National Credit Act 34 of 2005. Simply put, it's a process where you hand over your debt negotiations to a registered debt counsellor who becomes your advocate. They compile all your debts, analyse your income and expenses, and then negotiate with your creditors to create an affordable repayment plan.

But here's what makes debt review different from other debt solutions:

Debt Review vs. Debt Consolidation

Debt consolidation involves taking out a new loan to pay off multiple debts. The problem? You need a good credit score to qualify, and you're essentially adding more debt. If you're already struggling, this often isn't an option—and it can make things worse.

Debt review, on the other hand, doesn't require you to take on new debt. Instead, your existing debts are restructured into more manageable payments, often with significantly reduced interest rates.

Read more: Debt Review vs. Debt Consolidation vs. Administration

Debt Review vs. Administration

Administration is an older process for people with debts under R50,000. It requires a court-appointed administrator and has significant limitations. Debt review is more comprehensive, handles larger debt amounts, and is regulated by the NCR for consumer protection.

Debt Review vs. Sequestration (Bankruptcy)

Sequestration is a last resort where you're declared bankrupt. You lose control of your assets, and the consequences follow you for years. Debt review lets you keep your assets while getting your finances back on track—it's designed to be a solution, not a surrender.

Understanding the South African Debt Crisis: The Numbers Behind the Headlines

To understand why debt review exists and why it's so important, we need to look at the economic reality facing South African households.

The Scale of Consumer Debt

The total outstanding consumer credit in South Africa reached R2.40 trillion by the end of December 2024. This massive debt book breaks down as follows:

• Mortgages: R1.26 trillion (52.3% of total debt) – Generally lower risk due to property collateral
• Vehicle and Asset Finance: R526 billion (21.9%) – Secured against the vehicle
• Credit Cards and Overdrafts: R342 billion (14.2%) – Higher interest, unsecured
• Unsecured Credit (Personal Loans): R212 billion (8.8%) – Highest risk category

Where the Danger Lies: High-Risk Debt Products

Here's a statistic that should concern every South African considering a personal loan: non-bank personal loans have a serious delinquency rate of 41.3%. That means nearly half of all people with these loans are three or more months behind on payments.

Compare this to home loans, which have a delinquency rate of just 7.4%. The pattern is clear: the products marketed to those who can least afford them—high-interest personal loans and retail accounts—are the ones causing the most damage.

Clothing accounts follow closely with a 25.9% delinquency rate, and bank personal loans sit at 26.3%. These aren't just numbers—they represent millions of South Africans trapped in debt cycles they can't escape on their own.

Why People Fall Into Debt: It's Often Not Their Fault

Academic research has revealed something important: debt delinquency is primarily driven by unforeseen negative events—job loss, medical emergencies, illness—rather than simply spending beyond one's means.

This finding is crucial. Many consumers initially borrow within their financial means but are unable to sustain repayments when life throws them a curveball. With South Africa's unemployment rate at 33.2% and chronic low savings rates, most households simply don't have a financial buffer to absorb unexpected shocks.

The data shows that 72% of South African adults live in households earning less than R140,000 annually. When you're operating with such tight margins, a single unexpected expense—car repairs, medical bills, a family emergency—can trigger a debt spiral that's almost impossible to escape without help.

How Debt Review Works: Your Step-by-Step Journey to Debt Freedom

The debt review process might seem complicated, but it's actually quite straightforward when broken down into clear steps. Here's exactly what happens when you decide to take control of your debt:

Step 1: Free Financial Assessment

Everything starts with a confidential assessment of your financial situation. A debt counsellor reviews your income, expenses, and total debt obligations to determine if debt review is the right solution for you. This assessment is typically free and comes with no obligation.

Step 2: Application (Form 16)

If you qualify and decide to proceed, you'll complete a formal application called Form 16. This document collects all your personal information, income details, expenses, and creditor information. From this moment, your debt counsellor becomes your go-to person for all debt-related matters.

Step 3: Creditor Notification (Form 17.1)

Your debt counsellor sends Form 17.1 to all your creditors, informing them that you've applied for debt review. This is a crucial moment—from this point forward, your creditors cannot take legal action against you while the process unfolds. The notice also requests Certificates of Balance from each creditor to verify your outstanding debts.

Step 4: NCR Registration

You're registered on the National Credit Regulator's Debt Help database and allocated an NCR number. The NCR then notifies all credit bureaus that you're under debt review. This prevents you from taking on new debt—which might sound restrictive, but it's actually a protection mechanism to stop your situation from getting worse.

Step 5: Proposal Development

Using the confirmed debt figures, your debt counsellor drafts a restructured repayment proposal. This proposal includes reduced monthly instalments and, in many cases, significantly reduced interest rates—sometimes as low as 0% on unsecured debt. The proposal ensures your essential living expenses are covered while making meaningful progress on your debt.

Step 6: Negotiation and Court Order

Your debt counsellor negotiates with creditors on your behalf. If all creditors accept the proposal, it goes to the National Consumer Tribunal for a Consent Order. If any creditors don't agree, the matter goes to the Magistrate's Court for adjudication. In most cases, you don't need to attend these hearings—your debt counsellor's legal team handles everything.

Step 7: Monthly Payments

Once the court order is in place, you make a single monthly payment to a Payment Distribution Agent (PDA). The PDA then distributes the funds to all your creditors according to the approved repayment plan. No more juggling multiple payments or dealing with creditor harassment.

Step 8: Clearance Certificate

When you've paid off all your debts under the restructured plan, your debt counsellor issues a Clearance Certificate. This document notifies the credit bureaus to remove the debt review flag from your profile, restoring your ability to access credit again.

Learn more: How Debt Review Works: Step-by-Step Guide

The Key Benefits of Debt Review: What You Gain

Understanding the tangible benefits of debt review can help you decide if it's the right path for your situation:

1. Legal Protection From Creditors

Once you're under debt review, creditors cannot take legal action against you. This means no repossession of your car, no attachment of your home, and no garnishing of your salary—as long as you maintain your debt review payments. The NCR data shows that over 1.23 million South Africans are currently under active debt review, benefiting from this protection.

Related: How Debt Review Can Stop Repossession

2. Reduced Monthly Payments

Your debt counsellor negotiates reduced instalments that fit your actual budget. Instead of multiple unaffordable payments that leave you short for essentials, you'll have one manageable payment that covers all your debts while still allowing you to live.

3. Significantly Lower Interest Rates

This is often the game-changer. Credit card interest rates in South Africa can exceed 20% annually. Through debt review, these rates can be negotiated down dramatically—sometimes to as low as 0-1% on unsecured debt. This means more of your payment goes toward the actual debt, not just feeding interest charges.

See also: How to Reduce Your Credit Card Interest to 0%

4. End to Creditor Harassment

No more constant phone calls, threatening letters, or stress about who's going to contact you next. Your debt counsellor becomes the point of contact for all creditor communications. You deal with one person, one payment, one plan.

5. A Clear Path to Being Debt-Free

Perhaps the most valuable benefit is having a definite end date. Instead of feeling like you're drowning with no shore in sight, you'll know exactly how long it will take to become debt-free and have a structured plan to get there.

Read: Navigating Your Way to Debt Freedom: How Long Does It Really Take?

Important Considerations: Is Debt Review Right for You?

Debt review is a powerful tool, but it's not for everyone. Here are some important factors to consider:

You Cannot Take On New Credit

While under debt review, you're prohibited from applying for new credit. This includes credit cards, loans, store accounts, and overdrafts. This restriction exists to protect you from getting deeper into debt, but it does require planning. Before entering debt review, ensure you have your essential expenses covered without relying on credit.

More info: Can You Apply for Credit During Debt Review?

It's a Long-Term Commitment

Depending on your debt level, the debt review process typically takes three to five years to complete. The NCR reports that since the system's inception, approximately 1.87 million applications have been processed, but only 213,086 Clearance Certificates have been issued. This indicates that many consumers are still on their journey—it requires patience and commitment.

Your Credit Profile Will Show Debt Review Status

Credit bureaus will reflect that you're under debt review. However, this is removed once you receive your Clearance Certificate, and all records of debt counselling are cleared from your profile. Many people find that successfully completing debt review actually puts them in a stronger position to rebuild their credit than struggling alone.

Consistency Is Essential

If you default on your debt review payments, creditors can terminate the debt review and resume legal action. The protection only works if you maintain your agreed payments. However, if circumstances change, your debt counsellor can often negotiate adjustments to your plan.

Related: Can You Take a Break From Debt Review?

Do You Qualify for Debt Review?

To qualify for debt review in South Africa, you need to meet certain criteria:

1. You must be over-indebted: Your total debt obligations must exceed what you can reasonably afford to pay each month.
2. You must have a regular income: You need some form of consistent income to make the restructured payments, whether from employment, a business, or other sources.
3. You must be a South African citizen or permanent resident: The National Credit Act applies to South African consumers.
4. You cannot already be under administration or sequestration: Debt review is an alternative to these more severe options.

The statistics show that debt distress is most prevalent among consumers aged 36 to 45, and those in the middle-income band of R10,000 to R15,000 per month. However, debt review is available to anyone who meets the criteria, regardless of how much they owe.

Check eligibility: Is Debt Review Right for You?

Understanding Debt Review Fees

Debt review fees are regulated by the NCR to protect consumers. Here's what you can expect:

• Application fee: A once-off fee when you apply.
• Rejection fee: If your application is rejected (e.g., you're not over-indebted), a smaller fee applies.
• Restructuring fee: For preparing your debt restructuring proposal and obtaining the court order.
• Aftercare fee: A monthly fee (typically 5% of your distributable amount, up to R450) for ongoing case management.
• PDA fee: A small fee charged by the Payment Distribution Agent for processing and distributing your payments.

These fees are incorporated into your restructured payment plan, so you won't have to pay them separately upfront. The important thing is that all fees are regulated and transparent—always ask for a complete breakdown before committing.

Full breakdown: Understanding Debt Review Fees

Your Rights Under Debt Review

The National Credit Act provides significant protections for consumers under debt review:

• Right to protection from legal action: Creditors cannot pursue legal action, repossess assets, or harass you while you're under debt review and maintaining payments.
• Right to a fair assessment: Your debt counsellor must conduct a proper assessment and ensure debt review is genuinely appropriate for your situation.
• Right to a Certificate of Balance: When approaching completion of your debt review, you're entitled to demand a Certificate of Balance from creditors to verify your remaining debt. The NCR has noted that failure to provide this document is one of the most common contraventions they detect.
• Right to complain: If creditors don't comply with the process or overcharge you, you can escalate to the NCR. During the 2022/23 period, 127,816 consumers were reimbursed R14.2 million due to NCR enforcement actions.
• Right to a Clearance Certificate: Once you've paid all debts under the court order, you're entitled to a Clearance Certificate that clears your credit record of all debt review history.

Will Debt Review Affect Your Job?

This is one of the most common concerns we hear, and the answer is reassuring for most people: no, debt review will not affect your job. Your employer isn't part of the debt review process and won't be notified that you're under debt review.

The only exception is if you work as a financial advisor at a financial institution that specifically has a policy against employees being under debt review. If you're in this situation, check your employment contract or company policy. For everyone else—which is the vast majority of workers—debt review is handled confidentially between you, your debt counsellor, and your creditors.

Learn more: Will Debt Review Affect Your Job?

Taking the First Step: What to Do Now

If you're considering debt review, here's a practical plan of action:

1. Gather your financial information: Make a list of all your debts, including creditor names, outstanding balances, and monthly payments. Gather your most recent payslip and bank statements.
2. Calculate your monthly budget: List all your essential expenses—rent, utilities, food, transport, school fees. Be honest about what you actually need to survive versus what could be reduced.
3. Contact a registered debt counsellor: Look for an NCR-registered debt counsellor. They'll provide a free, no-obligation assessment of your situation and explain your options.
4. Ask questions: Understand the fees, the timeline, and what's expected of you. A reputable debt counsellor will be transparent about everything.
5. Make an informed decision: Debt review is a commitment, but for many South Africans, it's the difference between a lifetime of debt stress and a clear path to financial freedom.

Try our: Free Debt Review Calculator

Conclusion: Debt Review as a Path to Financial Recovery

The statistics are clear: millions of South Africans are struggling with debt, and the situation is largely driven by economic factors beyond individual control. With 10.41 million consumers having impaired credit records, the demand for formal debt relief is enormous—which is why over 1.23 million South Africans are currently under debt review, with Payment Distribution Agents managing R1.1 billion in monthly distributions.

Debt review isn't an admission of failure—it's a legal mechanism designed to help good people who've found themselves in difficult circumstances. Whether it's job loss, medical emergencies, or simply the cumulative effect of living in an economy where 43% of adults are using credit just to buy food, debt can happen to anyone.

What matters is what you do about it. Debt review offers protection, reduced payments, lower interest rates, and—most importantly—a structured path to becoming debt-free. It won't affect your job (in most cases), your employer won't know, and once you complete the process, your credit record is cleared of all debt review history.

If you're tired of the stress, the calls, the letters, and the constant anxiety about money, it might be time to explore your options. A free assessment costs nothing and could be the first step toward taking back control of your financial future.

You don't have to face debt alone.