Short answer:
When you apply for debt review in South Africa, a registered debt counsellor will assess your financial situation and begin the process of restructuring your debt under the National Credit Act (NCA). The purpose of debt review is to determine whether you are over-indebted and to create a more affordable repayment plan that helps you regain control of your finances.
Step 1: Your Financial Situation Is Assessed
After submitting your application, your debt counsellor will review your financial circumstances to determine whether you qualify for debt review.
This assessment typically includes:
• Your income and employment status
• Your monthly living expenses
• All outstanding debts and credit agreements
• Your ability to meet your current financial obligations
This process determines whether you are over-indebted as defined by the National Credit Act.
You can learn more about how debt review works here.
Step 2: Your Creditors Are Notified
If your application proceeds, your debt counsellor will notify all your credit providers that you have applied for debt review.
The notification informs creditors that:
• you are entering the debt review process
• your financial situation is being evaluated
• a new repayment plan may be proposed
The notification may also include information about your financial position and the proposed restructuring of your debt.
Step 3: Temporary Legal Protection Begins
Once your creditors have been notified of your debt review application, they generally cannot take legal action against you for up to 60 business days while the debt review process is underway.
During this period:
• your debt counsellor negotiates with your creditors
• a revised repayment plan is prepared
• discussions take place to reach an agreement that makes your debt repayments more manageable
This temporary protection allows time for a structured solution to be developed without the pressure of immediate legal action.
Step 4: A New Repayment Plan Is Negotiated
Your debt counsellor will develop a restructured repayment plan based on your financial circumstances.
This plan may include:
• Lower monthly instalments
• Extended repayment periods
• Possible interest rate adjustments, where applicable
The goal is to ensure that you can repay your debts in a manageable way while still covering essential living expenses.
Step 5: Court Approval (If Required)
If creditors accept the repayment proposal, the agreement may be submitted to a Magistrate’s Court to be made a legally binding court order.
If creditors do not agree to the proposal, the matter can also be referred to court for a ruling.
Once the court approves the repayment plan:
• it becomes a legally binding court order
• you must make payments according to the agreed structure
• creditors cannot take legal action against you without permission from the court.
You can learn more about whether you need to appear in court during debt review.
What Happens Next?
Once your debt review repayment plan is finalised, you will begin making one structured monthly payment according to the new arrangement until your debts are settled.
This structured process helps over-indebted consumers gradually repay their debts while maintaining financial stability.
If you are considering debt review, you can also learn more about:
• the costs involved with being placed under debt review
• whether you need an in-person consultation with Debt Rescue
• whether you can apply for debt review if you are unemployed
