While debt review is a necessary lifeline if you’re in serious financial trouble, it is important you are familiar with the process that you’re committing to. This isn’t a decision that you take lightly, so with that in mind, we want to take you through the debt review removal process and the various ways it works.

But first, let’s remind ourselves what debt review is. 

Debt Review in a Nutshell 

Debt review is a formal debt restructuring process for South Africans struggling to make ends meet at the end of each month. It was created under the National Credit Act 34 of 2005 (‘NCA’) and was the government’s answer to the rising problem of consumer debt and the chronic over-indebtedness that plagues many South Africans.  

Debt review was built with you, the consumer, in mind. It’s highly regulated and can only be conducted by an NCR qualified Debt Counsellor. This allows a debt counsellor to renegotiate and restructure your debt to an amount that you can afford each month. 

Your only requirement during the debt review process is to continue to pay your reduced monthly instalments. Once your plan is complete and your debt is paid off, your credit record is cleared and you can start living debt-free. 

What Does it Mean to Be Under Debt Review? 

Being under debt review is the first step to your financial freedom. It means that you have appointed a debt counsellor who has worked through your income and expenses and has determined that you are over-indebted and unable to make your month-end payments.  

As mentioned, this entire process is regulated by the NCR under the National Credit Act. 

What Are the Costs Involved? 

The National Credit Regulator (NCR) issues fee guidelines for debt counsellors that include an application and administration fee of R350 plus VAT, a restructuring fee equal to the first month’s instalment up to a maximum of R8,000 plus VAT (maximum of R 9000 for joint applications married in community of property), and a reckless lending fee of R 1500.00 plus VAT.  

There is a monthly maintenance fee of 5% of the instalment up to a maximum of R450 plus VAT. These fees ensure you always receive professional service from your debt counsellor and are included in your monthly instalments. 

There is also a legal fee payable to the attorneys for obtaining a court order to ensure you are protected from your credit providers for the duration of your debt review. Your debt counsellor provides details of this in your application. 

How Do Debt Review Payments Work with National Debt Counsellors? 

The debt review process is highly regulated by the National Credit Regulator. This means the fees that debt counsellors are allowed to charge, how monthly payments are collected and distributed, and the time frames for the processes are all contained in the National Credit Act or supporting guidelines from the NCR. 

As National Debt Counsellors, we don’t collect any money from your bank account directly. We only work through a licensed and accredited Payment Distribution Agency as per the terms of the NCA.  

We’ve chosen to partner with the biggest and most reputable PDA in the industry, Hyphen PDA. Every month, Hyphen deducts only the agreed instalment from your account via a DebiCheck-authenticated debit order. They distribute the funds directly to your creditors according to the agreed plan that has gone through court. 

We only charge the fees allowed under the NCA. You will see an upfront breakdown of all the fees charged by us and the PDA in your initial assessment. DebiCheck debit orders allow you to easily control your monthly debit orders. 

Your debt counsellor will help you set up your DebiCheck debit order when you first begin. 

How the Debt Review Process Works 

The process is much simpler (and less daunting) than you might expect. It is summarised in a few easy steps:  

Step 1: Request a Free Consultation from NDC 

One of our professional consultants at National Debt Counsellors contacts you and takes you through a free financial assessment. Don’t worry, this is completely confidential! 

Step 2: Complete Your Application Form 

If you qualify for debt review, we send you an application form (Form 16) to complete and sign. 

Step 3: We Notify Your Creditors 

We notify your creditors that you’ve applied for debt review. From here, you and your assets are immediately protected under the National Credit Act. 

Step 4: We Negotiate a New Payment Plan for You 

This is where the magic happens. We negotiate your loan agreements with your credit providers and restructure your repayments to an amount that’s affordable for you. 

Step 5: Pay a Single, Affordable Monthly Instalment 

Once we’ve handled the above steps for you, you begin paying one easy monthly instalment via an accredited PDA (Payment Distribution Authority), which distributes the funds to your credit providers. 

Step 6: We Make the Approved Plan an Order of the Court 

Our panel of Attorneys apply to the Magistrates Court on your behalf to make your restructured repayment plan an official order of the court. This will ensure you remain protected during the process. 

Step 7: Your Debt is Paid Off and Your Credit Record is Clear! 

Slowly but surely, you’ll pay off your debt. Once it’s repaid, we issue a clearance certificate and notify the credit bureaus to clear your credit record. You are now able to live in financial freedom! Cue the budget-friendly celebration. 

Now that we’ve covered what debt review is, let’s look at how you can complete it.

How to Complete Debt Review 

One can achieve debt review removal in one of two ways: 

Pay Your Debt

Firstly, and most obviously, debt review removal can be activated by paying off all your debt in full. It’s important to note that this only applies to unsecured credit and vehicle finance. You’re not required to pay off your home loan to complete the debt review process as long as repayments on the home loan are up to date. 

As you repay your debts one by one, your debt counsellor collects paid-up letters from your creditors and shares them with you. Once all your debts are completely paid off, your debt counsellor issues you with a clearance certificate and notifies the credit bureaus.  

You’re now debt-free, and your credit record is clear! 

Circumstance Change

The second way to complete the debt review process is if you have a substantial change in circumstance and can now afford to start paying your debt again at the original contract terms. This means you can be declared no longer over-indebted by the courts.  This only applies if there is no court order in place already declaring you overindebted. It’s important to note that if you request this, you’ll no longer pay your reduced monthly instalment amount. Rather, you’ll need to pay the amounts originally agreed with your creditors when you took out the loans.  

You’ll also no longer benefit from the reduced interest rates negotiated by your debt counsellor. In addition, you’ll need to prove to the court that you have had a significant change in circumstance. This could be a major promotion or that your partner has returned to work. 

As a rule, we suggest that you rather follow the first option, you can always pay more towards your debt at any stage of the process and thus reduce the time you will remain under debt review. You’ll also continue to benefit from the improved terms negotiated for you by your debt counsellor on the first option. Overall, settling your debt in full is always the best option. 

A Brief Warning 

It’s important to be careful and practice healthy scepticism towards anyone who tells you that they can take you through the debt review removal process for a fee by transferring to a new debt counsellor. This is not legal practice, and more often than not, these debt counsellors are not properly registered with the NCR and their actions are not in your best interest at all. 

Staying aware of these kinds of scams will save you a lot of time and a lot of money. 

How to Find a Trustworthy Debt Review Company 

When you’re considering going under debt review with a company in South Africa, there are quite a few key elements to keep in mind when deciding which company to work with. Some helpful initial questions to ask can include: 

Why Debt Review with National Debt Counsellors is a Good Idea 

The debt review process has a lot of benefits, the most significant is that it allows you to repay your debt in a structured and sustainable way. Your debt counsellor assesses your budget, considers essential expenditures such as groceries, housing, education, and transport, and then works out how much you can afford to pay going forward. 

Here are some of the other main reasons you should consider working with us to help clear your debt through this process: 

No More High Amounts 

We reduce your monthly repayments to an amount you can afford, which helps you slowly but surely step out of debt and into financial freedom.  

We Cover You (and your goods) 

Immediate protection is provided to you and your assets (including your house and car), so there’s no need to worry when you’re under the debt review process. 

We’re the Ultimate Middleman 

We negotiate with your credit providers directly, so you don’t receive any more harassing phone calls.  

More Peace, Less Stress 

We negotiate lower interest rates on your behalf, and we extend your repayment terms. This means you get a bit more breathing room as you begin moving towards more financial stability.  

We’re Comprehensive from Start to Finish 

Once you’ve cleared your debt, we apply to clear your credit report. So, all you must do throughout the process is make your payments. We do everything else on your behalf!  

The ultimate reason to apply for debt review is simply to get on a better financial wicket overall. To live debt-free is the goal, and with debt review it becomes possible. 

Why Choose National Debt Counsellors? 

We’re a team of leading debt review consultants who believe that debt doesn’t mean disaster. We assist everyday South Africans who find themselves struggling to meet their monthly financial obligations. Our team of Debt Counsellors are registered with the National Credit Regulator and offers you a no-obligation, free assessment of your financial situation. 

Our reputation for providing exceptional service is only enhanced by the great relationships we’ve cultivated with all the major credit providers in South Africa. This gives us confidence to negotiate the best payment plan to suit your financial needs and ensures that we protect you and your assets. 

We’re available from Monday to Saturday to assist you with any queries or questions you may have.