Debt Counselling in South Africa: A Complete Guide
How debt counselling works, who it may suit, what it can cost and how to check registered help before you decide.
What debt counselling is
Debt review, also called debt counselling, is a formal process under the National Credit Act for consumers who may be over-indebted. It is not a new loan. A registered debt counsellor assesses your income, essential expenses and credit agreements, then may propose a restructured payment plan through the required legal process.
Who may need it
Debt counselling may be worth investigating when you cannot keep up with normal instalments, debit orders are failing, or credit is being used for food, transport and other essentials. It is designed for people with income, but not enough safe cash flow to meet all credit obligations as agreed.
How the process usually unfolds
- You apply through a registered debt counsellor and provide income, expense and debt details.
- The counsellor notifies credit providers and credit bureaux that an assessment is underway.
- Your over-indebtedness is assessed using the information available.
- A repayment proposal may be negotiated and confirmed through the correct legal route.
- You make the agreed payments until the process can be completed and clearance considered.
Benefits and limits
Debt review can create structure and reduce payment chaos, but it also has consequences. While under debt counselling, you generally cannot take further credit. Fees apply, and secured debts such as vehicle finance or a home loan need careful treatment.
Debt counselling versus consolidation
Consolidation is usually new credit used to settle existing balances. Debt counselling is a statutory over-indebtedness process. If you can still afford your debt and qualify for new credit, consolidation may be compared. If you cannot meet obligations, debt counselling may be a more appropriate conversation with a registered professional.
Ask who will handle your information, whether the person is registered or works with a registered professional, what fees apply and what happens to your credit access.
How Consolidation Relief fits in
Consolidation Relief helps you understand your position and then routes suitable cases for review by the right registered professionals. If you are unsure which path fits, you can start the assessment.