How does debt review work in South Africa?
Debt review is a legal process under the National Credit Act for people whose debt repayments have outgrown their income. A registered debt counsellor assesses the full picture, negotiates reduced restructured repayments with the credit providers, and the plan is made a formal order.
While under review, the credit bureaus flag the record and no new credit can be taken. When the restructured debts are settled, a clearance certificate is issued and the flag comes off.
Who the process is designed for
The Act's test is over-indebtedness: after reasonable living expenses, the income genuinely cannot cover the debt repayments as they currently stand. Debt review exists for that situation — not for a tight month, and not as a way out of debts that could be paid.
The National Credit Act created it so that the alternative to drowning isn't only sequestration. The debts remain owed in full; what changes is the shape of the repayments.
How the process runs
It starts with an application to a debt counsellor registered with the National Credit Regulator. The counsellor examines income, expenses and every credit agreement, and makes a formal finding on whether the household is over-indebted.
If it is, the counsellor negotiates a restructured plan with the credit providers — typically lower instalments over longer terms, sometimes with interest concessions the providers agree to. The plan is confirmed by a court, or by the National Consumer Tribunal where everyone consents, which turns it from a proposal into an order.
From there, one consolidated payment usually goes to a registered payment distribution agency each month, which splits it among the providers according to the plan. The counsellor's fees are regulated by the National Credit Regulator and are built into the arrangement.
What changes while under review
Debt review is a trade: real protection in exchange for real restrictions.
- The credit bureaus flag the record as under debt review — visible to any lender who checks
- No new credit agreements can be entered into while the review runs
- Debts inside the review are shielded from legal action, provided the restructured payments are kept up
- Miss the restructured payments, and a provider can move to end the review for its debt — the protection is conditional, not permanent
The exit: a clearance certificate
When the restructured debts are paid up, the debt counsellor issues a clearance certificate. There's one notable exception in the Act: a home loan doesn't have to be settled in full — it has to be up to date according to the arrangement.
The certificate goes to the credit bureaus and the debt-review flag is removed from the record. What a credit record shows after that — and what moves it — this library covers in "What is a good credit score in South Africa, and what moves it?"
Debt review vs administration vs sequestration
Three different laws solve three different sizes of problem, and they are often confused.
- Debt review (National Credit Act): debts repaid in full on a restructured plan; assets stay put; exits with a clearance certificate
- Administration (Magistrates' Courts Act): an older mechanism for smaller total debts — the law caps the amount that qualifies — with ongoing administration costs deducted from each payment
- Sequestration (insolvency law): the estate is surrendered to a trustee, assets can be sold, and creditors may receive only part of what's owed; it ends in rehabilitation rather than a clearance certificate
Terms used on this page
- debt counsellor
- A professional registered with the National Credit Regulator who assesses over-indebted consumers and negotiates restructured repayment plans with their credit providers.
- credit bureau
- A company that collects records of how people borrow and repay, and turns that history into the credit reports and scores lenders check.
Reviewed July 2026