Debt review is a formal process designed to help over-indebted consumers manage their credit repayments. A registered debt counsellor assesses your income, essential living expenses and existing credit commitments to determine whether your current repayments are affordable. Where appropriate, the debt counsellor develops a proposed repayment arrangement that takes your financial circumstances into account. The process can help you work towards repaying your debts while benefiting from legal protections that may apply when the relevant requirements are met.
Debt review can help you:
Debt review does not eliminate debt. Instead, it reorganises repayment terms so consumers can regain financial stability without defaulting further. Learn more about our debt review solutions.
You may be over-indebted if your income is not sufficient to cover your reasonable living expenses and your existing credit repayments. This can happen when your financial circumstances change or your debt commitments become difficult to manage. Common contributing factors include:
A registered debt counsellor can assess your financial circumstances to determine whether you may qualify for debt review. The assessment considers your income, expenses and credit obligations rather than relying on a single factor.
Understanding the debt review process can remove uncertainty. Below is how the legal framework works.
A consumer applies for debt review through an NCR-registered debt counsellor. Financial details — including income, expenses, and outstanding debts — are submitted for review.
Form 16 confirms that the application has been received and that a formal assessment is underway.
The debt counsellor conducts a detailed affordability assessment.
If the consumer is found to be over-indebted, Form 17.1 is issued to credit providers, formally notifying them that the consumer is under debt review.
A revised repayment proposal is drafted based on what the consumer can reasonably afford after essential living expenses are considered.
The repayment proposal is submitted to the Magistrate’s Court. Once approved, it becomes legally binding.
This court order provides the legal protection associated with debt review.
The consumer makes one consolidated monthly payment to a registered Payment Distribution Agency. The PDA distributes payments to credit providers according to the court-approved plan.
Once all debts included in the review are fully repaid, a clearance certificate is issued. Credit bureaus are instructed to update the consumer’s record to reflect successful completion.
Who may qualify for debt review?
Consumers who are struggling to meet their credit repayments may benefit from an assessment by a registered debt counsellor. The counsellor will consider your income, living expenses and existing credit commitments to determine whether you are over-indebted and whether debt review is suitable for your circumstances.
What should I prepare before applying?
You should be ready to provide details of your income, household expenses, credit agreements, outstanding balances and current repayments. Accurate information helps the debt counsellor assess your financial position and consider the options available to you.
What should I understand before starting debt review?
Debt review is a formal process with ongoing responsibilities. You must provide accurate financial information and meet the obligations of your applicable repayment arrangement. Legal protections are subject to the relevant requirements, and debt review does not eliminate your outstanding debt.
For more detail about repayment amounts, fees and missed payments, read our guide to Debt Review Costs and Repayments.
How are debt review repayments determined?
The proposed repayments are based on an assessment of your income, essential expenses and credit commitments, together with the applicable requirements and formal repayment arrangement. The amount will depend on your individual circumstances.
What happens if I miss a payment?
Missing a payment can put your repayment arrangement at risk and may affect the legal protections available to you. Contact your debt counsellor promptly if you are unable to pay, rather than simply stopping payments.
What if my financial circumstances change?
If your income or essential expenses change, contact your debt counsellor as soon as possible. Explain what has changed and ask what options may be available under the applicable process. Do not assume that your repayment obligations have changed until this has been properly addressed.
For more information about creditor interactions, legal protections and your obligations, read our guide to Debt Review Rights and Responsibilities.
How do I know when I have completed debt review?
Completion depends on meeting the applicable legal requirements for your circumstances. Your debt counsellor can confirm whether you qualify for a clearance certificate and explain any remaining steps.
Will my credit record be updated after debt review?
The relevant credit bureau records should be updated through the applicable process following completion. If you believe your record has not been updated correctly, contact your debt counsellor and the relevant credit bureau to establish what is required.
Can I apply for credit after debt review?
Your ability to apply for credit depends on your circumstances and whether the relevant completion and credit record requirements have been met. Lenders will still assess applications according to their lending criteria, affordability assessments and applicable law.
For more detail on clearance certificates, credit bureau updates and life after debt review, visit our guide to Completing Debt Review.
