Debt Counselling Process South Africa (2026): Step-by-Step
Over 10 million South Africans are over-indebted — spending more than their income on debt repayments. Debt counselling (also called debt review) is the legal process under Section 86 of the NCA that restructures your payments to make them affordable. Here's exactly how it works.
The 7-Step Debt Counselling Process
Initial Consultation (Day 1)
Meet with an NCR-registered debt counsellor. They gather: all debts (loans, credit cards, store accounts), monthly income, essential expenses (rent, food, transport, medical). The counsellor assesses if you qualify — you must be genuinely over-indebted (debt payments exceed available income).
Application Filed (Day 1-5)
You sign the Form 16 (application for debt review). The counsellor notifies all your creditors AND all credit bureaus within 5 business days. From this moment: creditors cannot take legal action against you (Section 88(3) NCA protection).
Debt Assessment (Week 1-4)
The counsellor verifies all debts, checks balances, challenges any incorrect charges. They create a detailed budget showing your income minus essential expenses = amount available for debt repayment.
Restructuring Proposal (Week 2-6)
The counsellor proposes new repayment terms to each creditor: typically lower monthly payments, extended terms, and reduced interest rates. For example: a R3,000/month payment at 27% APR might become R1,200/month at 0-3% for 48 months.
Negotiation & Consent Order (Month 1-3)
Creditors can accept the proposal (consent order) or it goes to the Magistrate's Court for a debt restructuring order. Most secured creditors (home/vehicle loans) need court orders. The counsellor handles all legal proceedings.
Monthly Payments (Ongoing)
You make one single monthly payment to a PDA (Payment Distribution Agency) which distributes it to all your creditors. This continues until all debts are fully paid. The PDA fee (5% of payment) is included.
Clearance Certificate (End of Process)
Once all short-term debts are paid, the counsellor issues Form 19 (clearance certificate). This is sent to all credit bureaus who remove the debt review flag. Your credit record starts rebuilding immediately.
What Debt Counselling Costs
| Fee Type | Amount | When Paid |
|---|---|---|
| Application fee | R50 | Once-off (included in payment) |
| Restructuring fee | R300 per R50k tranche | Spread over first months |
| Aftercare fee | 5% of monthly payment | Monthly (deducted by PDA) |
| Legal/court fees | R800 – R1,500 | If consent order needed |
Real Example: Before vs After Debt Counselling
❌ Before — Over-Indebted
- Income: R18,000/month
- Personal loan: R3,200/mo (27% APR)
- Credit card: R2,800/mo (21% APR)
- Store accounts: R1,500/mo (25% APR)
- Vehicle: R4,500/mo (13% APR)
- Total debt payments: R12,000/mo
- Left for living: R6,000 ⚠️
✅ After — Restructured
- Income: R18,000/month
- Personal loan: R1,100/mo (0% for 48mo)
- Credit card: R900/mo (0% for 48mo)
- Store accounts: R500/mo (0% for 48mo)
- Vehicle: R3,800/mo (8% for 60mo)
- Total debt payments: R6,300/mo
- Left for living: R11,700 ✅
Monthly savings: R5,700. Trade-off: longer repayment period and restricted access to new credit until clearance.
Pros & Cons of Debt Counselling
✅ Pros
- • Legal protection from creditors (no garnishee, no repossession)
- • Interest rates reduced significantly (often to 0%)
- • One affordable monthly payment
- • Assets (home, car) protected by court order
- • Debt review flag removed upon clearance
- • Professional support throughout the process
❌ Cons
- • No new credit until clearance (3-5 years)
- • Debt review flag visible on credit report
- • Longer total repayment period
- • Aftercare fees (5%) reduce payments to creditors
- • Some employers check credit (may affect job applications)
- • Exiting early is difficult without full payment
Next Steps by Situation
Frequently Asked Questions
How much does debt counselling cost in South Africa?
Fees are regulated by the NCR and capped by the NCA: Application fee: R50 (once-off). Restructuring fee: R300 for the first R50,000 of debt + R100 per additional R50,000 (max ~R8,000). Aftercare fee: 5% of your monthly repayment (ongoing, deducted from your payment). Legal fees: ~R800-R1,500 if a consent order is needed. Total first-year cost: approximately R7,000–R9,000 depending on debt level. All fees are included in your monthly repayment — you don't pay upfront.
How long does debt counselling take?
The average debt counselling process in South Africa takes 36-60 months (3-5 years). Short-term unsecured debts are typically cleared in 24-36 months. If you have a home loan or vehicle finance, it may extend to 60 months. The timeline depends on your total debt, income, and how aggressively you can repay. You can always pay more than the minimum restructured amount to finish faster.
Can I exit debt counselling early?
Yes — two ways: (1) Pay off all your debts ahead of schedule and request a clearance certificate from your debt counsellor; (2) Apply to court under Section 71 of the NCA to be removed from debt review — but this requires proving you can afford original repayments. Warning: exiting early without paying off debts will leave negative marks on your credit report and creditors can resume legal action.
Can I get new credit while under debt counselling?
No — this is a legal restriction. Under Section 88(1) of the NCA, no credit provider may grant you new credit while you are under debt review. If a lender offers you credit while you're under debt counselling, they are breaking the law. This restriction lifts only once you receive a clearance certificate or a court order removes you from debt review.
Does debt counselling affect my credit score?
Yes, temporarily. A debt review flag is placed on your credit report at all four bureaus (TransUnion, Experian, XDS, Compuscan). This flag is removed when you receive your clearance certificate. After removal: your score starts rebuilding immediately. Most people see a usable credit score within 6-12 months of clearance. The flag is better than judgements or defaults — it shows you took responsible action.
Responsible Lending Notice
Important: Only use an NCR-registered debt counsellor. Verify registration at NCR.org.za. Avoid any person claiming to be a debt counsellor who asks for upfront payments or is not NCR-registered.
Debt counselling is a right under Section 86 of the National Credit Act. No one can deny you the right to apply.
NCR Consumer Line: 0860 627 627 | www.ncr.org.za
Struggling with Debt Payments?
Compare your options — debt counselling, consolidation, or refinancing.
Compare Options Now →