What is debt counselling?

Debt counselling was introduced in South Africa in 2007, when the National Credit Act (NCA) came into effect. The aim of debt counselling is to assist over-indebted consumers to use their income efficiently, thus paying off their debt in a manner that is acceptable for both the consumer and the credit provider/s.


A consumer is regarded as over-indebted when he/she is unable to make his/her monthly debt repayments after all living expenses and statutory obligations have been deducted from his/her salary.

Debt Review

A debt counsellor will determine whether a consumer is over-indebted, in which case he/she will start with the debt review process. This is a period of 60 days during which all the credit agreements that a consumer has entered into and is still paying  off, are scrutinized, and a restructured payment plan is set up for all creditors. During this process all creditors are informed of the fact that the consumer is undergoing debt review, which prevents the creditors from repossessing any assets of the consumer as well as preventing legal action against the consumer.

Obligations of consumers

Debt review is not an easy way out of debt for consumers. It is a difficult process and various sacrifices on luxury items have to be made by consumers when undergoing the process. Furthermore, just as the law prevents creditors from taking action, the law expects various conditions to be upheld by the consumer, including (but not limited to) not entering into a credit agreement with any facility for any reason while under debt review. Also, the consumer is expected to make the monthly payment as per the restructured payment plan. Should a consumer not comply with these instructions while under debt review, the process may summarily be cancelled, which opens the consumer up for legal action and repossession of assets.

Excluded credit agreements

It is very important for consumers to note that any agreement where legal action has been taken, ie a summons has been issued and serviced, can NOT be included in the debt review. This means that the law will take its course on that agreement, which could result in a judgment against the consumer.

Undergoing debt counselling should be seen as a lifeline when you are lost in a sea of debt, and should be entered into sooner rather than later. Consumers should not wait until it is too late and a summons is issued. Rather take action NOW and contact a counselor to assist you.


Further reading:

Process of debt counselling

When should you seek debt counselling?

Strategies for wise borrowing

How to get out of debt? 



Copyright © 2010 Amelia Aitken


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