In 2007, the National Credit Act (NCA) introduced debt counselling / debt review as a legal process to protect over-indebted consumers. South Africa was facing a debt crisis, with reckless lending and unaffordable credit, pushing millions of consumers into severe financial distress. South Africans were losing their homes and vehicles, often without fully understanding their rights. Debt Counselling was introduced as a structured, legal and protective measure to prevent this from happening.
It still remains one of the most effective ways to help over-indebted South Africans manage their debt, avoid legal action and repossession and give them the ability to work toward financial rehabilitation.
Debt counselling isn’t just a form of debt relief — it’s a long-term solution that helps individuals rebuild their financial future. Here are the key benefits:
We negotiate with your creditors to reduce your instalments and extend your repayment terms.
Instead of making multiple payments, you will only make one reduced payment each month to a registered Payment Distribution Agency.
Once you are placed under debt counselling, your creditors are not allowed to take any legal action or repossess your assets, for the debts included in your debt repayment plan.
When you are placed under debt review your credit record will reflect this, but this is seen as a pro-active and responsible step. Once you have fully paid off your debt, you will receive a clearance certificate, and the debt review flag will be removed from your credit profile.
We are here to help you budget, provide emotional support, help you to rebuild your future and most importantly to avoid falling back into debt.
Take a look at how Debt Counselling actually works for your budget. Debt Counselling ensures that your monthly debt repayment amount is affordable, leaving you with enough to cover your essential living expenses:
Our process is simple, legally supported, and proven to work. Here’s how it unfolds:
We evaluate your income, expenses, and debts to determine if you’re over-indebted. You will need to supply us with:
Application checklist:
If you qualify, one of our NCR-registered debt counsellors will work out a personalised repayment plan, based on your affordability and legal requirements.
We notify your credit providers and the credit bureaus that you’re under debt review. From this point forward, you are:
We will renegotiate the terms of your credit agreements to lower your instalments and extend your payment terms. This new plan allows for your essential expenses to be factored into your new repayment plan.
Your new restructured repayment plan is submitted to the Magistrate’s Court and, once approved, it becomes legally binding. This ensures creditors cannot change the terms or take action against you.
You pay a single amount to the Payment Distribution Agency (PDA) who pays all your creditors.
Once your debts are paid off, you receive a clearance certificate, and your credit profile is updated. You will be able to re-enter the credit market with a clean record.
You are Legally Protected from Day One
The moment you are placed under debt review, your rights are protected under the National Credit Act.
All Fees are Regulated and Built into your Repayment
Plan Debt Counselling fees are strictly regulated and included into your monthly repayment plan.
This is your new financial beginning – not a black mark
Debt counselling is a legal rehabilitative process designed to help you pay off what you owe in an affordable way.
Many South Africans are over-indebted and are grappling with similar challenges in today’s current economic climate. They are finding it increasingly difficult to manage their finances as they try to keep up with the rising costs of essential goods and services.
Debt counselling, introduced by the National Credit Act (NCA) in 2007, is a process designed to help over indebted South Africans become debt free in an affordable manner.
Reduced Monthly Repayments
Debt counselling allows South Africans to renegotiate payment terms with creditors, resulting in lower monthly debt payments. This is achieved by extending the loan periods, making it easier for you to manage your monthly expenses.
Debt Consolidation
Managing multiple payments to various creditors can be complicated and stressful. Debt counselling simplifies this by consolidating your debt into a single fixed repayment plan. This provides a clear timeline for when the debt will be paid off. This can help with financial planning and gives a clear end date to your debt, unlike revolving credit accounts that can remain indefinitely if only minimum payments are made.
Legal Protection
Debt counselling legally protects you from creditors taking action against you (like repossessing assets or garnishing wages). This legal protection kicks in as soon as the debt counselling process starts and lasts until all the debts are settled.
Structured Debt Repayment Plan
Your debt counsellor will develop a structured repayment plan that combines all your debt repayments into a single, more manageable monthly amount. This plan ensures that essential living expenses are covered first, with the remaining funds used to repay your debt.
Avoids Long Term Credit Score Damage
By effectively managing debt through debt counselling, individuals can avoid being sequestrated or having their credit score severely damaged. While under debt counselling, a flag will be noted on your credit profile, it is generally seen as a positive step towards managing your debt responsibly.
Financial Guidance and Support
Debt counselling provides individuals with financial advice and support throughout the process. This includes teaching budgeting skills and how to handle finances more effectively to avoid falling back into debt in the future.
If you’re finding it hard to keep up with your bills and debt payments, the first step is to contact a registered debt counsellor. This is someone who’s trained and officially recognised to help people manage their debt.
You’ll need to give your debt counsellor details about your income, what you spend your money on each month, and all the debts you owe. This helps them understand your situation.
If you decide the process is for you, your debt counsellor will tell your creditors (the people you owe money to) and the credit bureaus (the companies that track credit scores) that you’re under debt counselling. This means you’re trying to fix your debt situation, and during this time, you can’t get more credit (like loans or new credit cards).
Your debt counsellor will work out a new debt repayment plan with your creditors. This plan might mean you pay less each month but for a longer time. The plan is made to fit what you can afford after covering your basic living costs.
Instead of paying each creditor separately, you’ll make one monthly debt repayment to a Payment Distribution Agency (PDA). This agency then pays your creditors for you. This makes it easier to manage your money and ensures you don’t miss any payments.
Your debt counsellor might check in with you to see how things are going. If your financial situation changes, they can adjust your debt repayment plan.
Once you’ve paid off all the debt included in your debt counselling plan (excluding your home loan, if it wasn’t part of the process), your debt counsellor will issue you with a clearance certificate. This certificate confirms that your debts have been fully settled. Your credit record will also be updated to reflect that you are no longer under debt counselling, allowing you to move forward with managing your finances.
