Debt Review: Regain Financial Control & Rebuild Your Credit
When monthly repayments start consuming most of your income, keeping up with every account can become difficult.
Credit cards, personal loans, store accounts, vehicle finance and other commitments may all fall due at different times, while essential household expenses still need to be paid.
For consumers who have become over-indebted, debt review, also known as debt counselling, provides a formal way to address the situation.
Debt review is not a new loan and it does not erase your debts. Instead, it is a debt-relief measure provided for under the National Credit Act (NCA), designed to help qualifying over-indebted consumers restructure their debt repayments.
The process can include budget advice, negotiations with credit providers and restructuring of debt.
Key Takeaway: Used correctly, debt review can provide a structured path towards becoming debt-free. However, it also comes with important restrictions, costs and responsibilities that you should understand before applying.
What Is Debt Review?
Debt review is a formal process intended for consumers who are over-indebted.
According to the National Credit Regulator (NCR), debt counselling is provided for under Section 86 of the National Credit Act 34 of 2005. A registered debt counsellor assesses your financial position and determines whether you are over-indebted.
Being over-indebted generally means that, based on your financial circumstances, you are unable or are unlikely to be able to meet all your credit obligations as required.
Warning signs of over-indebtedness include:
- Your monthly expenses exceeding your available income
- Borrowing money to repay other debts
- Using a credit card or overdraft for basic necessities because your income is already committed
- Skipping one account to pay another
- Regularly falling behind on repayments
- Having too little money left for essential expenses after paying creditors
Debt review is intended to deal with the underlying debt problem rather than provide access to more borrowing.
How Does Debt Review Work?
The process starts by approaching a debt counsellor registered with the National Credit Regulator.
Important Verification: Always verify the counsellor's registration before providing personal information, signing documents or paying fees. The NCR maintains an official register that consumers can use to check registered debt counsellors.
1. Your financial position is assessed
The debt counsellor reviews your income, household expenses and credit obligations to determine whether you are over-indebted. You will need to provide accurate information—hiding debts or understating expenses can prevent a realistic plan.
2. Your debts are reviewed
Your credit agreements and repayment obligations are examined so the debt counsellor can work on a restructuring proposal based on what you can reasonably afford after essential living expenses.
3. A repayment proposal is developed
Debt counselling can involve negotiations with credit providers for reduced payments and restructuring of debt. You remain responsible for repaying your debts according to the agreed arrangement.
4. Formal legal procedures
Debt review is regulated by the NCA and involves formal legal procedures. It should not be confused with an informal agreement or a commercial debt-consolidation product.
5. Structured repayments
Once active, you make agreed repayments. Consumers may make a single payment through a registered Payment Distribution Agent (PDA), which distributes funds to creditors.
What Happens to Your Credit Profile During Debt Review?
Being under debt review does not simply mean that you have been “blacklisted”.
According to the NCR, a debt counselling indicator is placed on the consumer's credit bureau profile to show that you have been declared over-indebted.
Major Restriction: You cannot obtain further credit while under debt counselling. Debt review is not suitable for someone who intends to apply for another loan or credit card shortly after entering the programme.
Does Debt Review Improve Your Credit Score?
Debt review should not be marketed as a quick credit-score improvement service. Its primary purpose is to help deal with existing debt in a structured manner.
Your credit score is calculated based on factors like payment history, debt levels, adverse listings, and enquiry history. There is no responsible way to promise an immediate score increase by a specific number of points.
The Core Strategy: First resolve the debt problem. Then rebuild your credit profile after completing the process and receiving your clearance certificate.
What Are the Potential Benefits?
| Potential Benefit | What It Means |
|---|---|
| Structured repayment | Your debts are dealt with through a formal repayment process |
| Budget assessment | Your income and necessary living expenses are protected |
| Negotiation | A debt counsellor negotiates reduced payments with credit providers |
| Debt restructuring | Repayments are formally restructured under the National Credit Act |
| Clear financial objective | The focus shifts to repaying existing debts rather than borrowing more |
| Professional assistance | A registered debt counsellor guides you through the process |
What Are the Disadvantages?
- You cannot take out additional credit: Access to new credit is blocked while under debt counselling.
- Interest does not automatically stop: The NCR explicitly states that interest does not freeze simply because you entered debt review.
- Debt review is not free: Debt counselling involves formal fees and costs regulated by legal guidelines.
- It takes time: Completing a restructured repayment plan requires long-term commitment.
Can You Cancel Debt Review Whenever You Want?
Be extremely careful with advertisements promising to “remove debt review instantly” or “clear your debt review flag for a fee.”
NCR Warning: The National Credit Regulator has explicitly warned consumers against companies offering paid "debt review removal". Consumers declared over-indebted cannot simply pay a third party to remove the status whenever they choose.
When Do You Receive a Clearance Certificate?
A clearance certificate is issued once all restructured debts (except a mortgage loan where applicable) have been fully paid according to the agreement.
The NCR explains that after receiving a clearance certificate, information relating to accounts under debt counselling is expunged from credit bureau records, allowing you to begin rebuilding your profile.
How to Rebuild Your Credit After Debt Review
- Check your credit report: Confirm that debt review indicators and settled balances are properly updated.
- Build a realistic monthly budget: Ensure housing, food, transport, and utilities are prioritized.
- Pay every account on time: Establish consistent payment records moving forward.
- Avoid applying everywhere: Limit new hard credit enquiries to protect your score.
Beware of Debt Review Scams and Misleading Calls
Be cautious when callers unexpectedly offer to reduce your monthly instalments or promise "debt consolidation" without revealing that it is formal debt review.
- Always ask whether the offered service is formal debt counselling under the NCA.
- Demand the counsellor's NCR registration number and verify it on the official register.
- Read all documentation carefully before signing or providing bank details.
Frequently Asked Questions
Is debt review the same as debt consolidation?
Can I get a personal loan while under debt review?
Does interest stop during debt review?
Does debt review mean I am blacklisted?
Can someone remove debt review from my credit profile for a fee?
Will my credit score immediately improve after debt review?
Final Thoughts
Debt review can be a valuable option when debt has reached the point where normal monthly repayments are no longer sustainable. But it should not be treated as a quick way to reduce instalments or erase debt.
The real objective is not simply to qualify for another loan. It is to regain control of your finances and put yourself in a position where debt no longer controls your monthly budget.
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