Debt review is a debt relief measure in South Africa that helps consumers with excessive debt to become debt-free. The National Credit Act (NCA) introduced the process in 2007 to prevent over-indebted consumers from being blacklisted and having to deal with the consequences.

Debt review has become a lifeline for many South Africans struggling to cope with unmanageable debt.

If you earn an income but are unable to meet your minimum credit obligations each month, help is available through a process called debt review.

The National Credit Regulator (NCR) has provided guidelines that debt counsellors must follow when determining if a consumer is over-indebted and eligible for debt review. These guidelines consider the consumer's income, expenses, and debt obligations to determine whether they have sufficient funds to cover their living costs while also servicing their debt.

Debt Review legislation is designed to protect over-indebted South Africans when they can no longer afford to pay their creditors. This means your assets are protected, and it ensures that you have an affordable way to cover your living costs while working to become debt-free.

Creditors Cannot Harass You

Once you are under debt review, your creditors are not allowed to contact you directly. All communication between you and your creditors will go through a debt counsellor, who will act as a mediator between you and your creditors.

One Reduced Monthly Debt Repayment

The goal of the debt review process is to reduce your monthly debt repayments to a more manageable amount so that you can meet your financial obligations while still affording your basic living expenses. When you enter debt review, your debt counsellor will negotiate with your creditors to reduce your monthly payments and possibly lower interest rates, which can help you manage your debt more effectively.

Protection from Legal Action

While you are under debt review, your creditors cannot take legal action against you, providing you with relief from the stress of debt collection.

Your Assets Are Protected

When you enter debt review, a debt counsellor will negotiate with your creditors on your behalf to come up with a more manageable repayment plan. As long as you stick to this payment plan, your assets, such as your house or car, are protected from repossession or legal action by your creditors. This can give you peace of mind and help you maintain financial stability while working toward becoming debt-free.

Become Debt-Free

One of the primary benefits of debt review is that it can help you become debt-free. This is achieved by negotiating with creditors to lower your monthly payments and interest rates, and by extending the repayment period. By following a debt review plan and making regular payments, you can eventually pay off your debt in full and become debt-free. This can have a significant positive impact on your financial well-being, as it frees up money that was previously going toward debt payments, allowing you to start saving for the future. 

Overall, debt review can provide consumers with a path to financial stability and a way to manage their debt effectively while protecting them from legal action and helping them rebuild their credit over time.

Getting your free and no-obligation debt review assessment is the first step in the debt review process. The assessment determines whether you are over-indebted and therefore eligible for debt review. A debt counsellor will conduct a thorough assessment of your financial situation, taking into account your income, expenses, and debt. During the assessment, the debt counsellor will review your credit report to get an overview of your debt and credit history. They will also look at your monthly income and expenses to determine your debt-to-income ratio. If your debt-to-income ratio is high, it's a sign that you are struggling to keep up with your debt repayments.

Based on the assessment, the debt counsellor will determine whether you are over-indebted. In South Africa, an individual is considered over-indebted if they cannot fully meet their debt obligations while still having enough money to cover their basic living expenses.

If the debt counsellor concludes that you are over-indebted and you decide to proceed with an application, they will then go ahead and apply for debt review on your behalf. The application involves submitting the assessment report and other relevant documents to the credit providers for feedback.

What Happens When I Apply for Debt review?

Overall, the assessment process is crucial to ensure that only qualifying individuals are admitted to the debt review program. It also helps the debt counsellor understand the individual’s financial situation and create a realistic repayment plan tailored to their needs.

Debt review legislation stipulates that once an individual is under debt review, their creditors cannot take legal action against them without the court's permission. This legal protection is provided under the National Credit Act (NCA) and is designed to protect consumers with excessive debt from harassment and unfair debt collection practices.

When an individual applies for debt review, the debt counsellor will notify all their creditors of their intention to enter the debt review process. The notification will include details of the individual's financial situation and the proposed repayment plan. Once a creditor is informed of the debt review application, they cannot take legal action against the individual for up to 60 working days.

During this 60-day period, the debt counsellor will work with the creditor to try and reach an agreement on the proposed repayment plan. If an agreement cannot be reached, the debt counsellor can refer the case to a magistrate's court for a decision.

If the court approves the proposed repayment plan, it becomes a court order, and the individual is legally obligated to make the agreed-upon payments. The court order also provides legal protection to the individual, as it prevents their creditors from taking any legal action against them without the court's permission.

When you are under debt review, you will make one affordable monthly payment to a Payment Distribution Agency (PDA). The PDA will then distribute the funds to your creditors according to the negotiated repayment plan.

The debt counsellor will work with you to create a repayment plan that is affordable and manageable, considering your income and expenses. This plan typically includes reduced monthly payments and an extension of the repayment period, allowing you to settle your debt over a longer period.

Once the repayment plan is agreed upon, the debt counsellor will submit it to your creditors for approval. If your creditors agree to the proposed repayment plan, they will stop all debt collection efforts, including phone calls, letters, and legal action.

You will then make your monthly payments to the PDA, which will distribute the funds to your creditors as per the repayment plan. The PDA will charge a small fee for their services, which is usually included in your monthly payment.

It’s important to note that it is crucial to make your monthly payments on time and in full to the PDA. Failing to make payments could result in your creditors resuming their debt collection efforts, and you may lose the legal protection provided by the debt review process.

Overall, when you are under debt review, payments are made to a Payment Distribution Agency (PDA), which distributes the funds to your creditors based on the negotiated repayment plan. It is essential to make your payments on time and in full to maintain the legal protection offered by the debt review process.

The debt review process provides legal protection to individuals who are over-indebted when they enter the debt review process. This protection is granted under the National Credit Act (NCA) and is designed to protect consumers from harassment and unfair debt collection practices.

Once an individual enters the debt review process, their creditors are legally required to stop all debt collection efforts, including phone calls, letters, and legal actions. This protection remains in place for the duration of the debt review process, which typically lasts between three to five years, depending on the individual's circumstances.

During this time, the individual will make one affordable monthly payment to a Payment Distribution Agency (PDA), which will distribute the funds to their creditors according to the negotiated repayment plan. This payment is often lower than the individual's original debt repayments, making it more manageable for them to keep up with their financial obligations.

Once you have completed the debt review process and fully settled all your debts, your debt counsellor will issue a clearance certificate. The clearance certificate serves as proof that you have completed the debt review process and that you are no longer under debt review.

If all the documentation is in order, the clearance certificate can be issued within a few days after you complete the debt review process.

However, if there is any outstanding documentation, the process may be delayed.

It is important to stay in contact with your debt counsellor throughout the entire debt review process to ensure everything runs smoothly. After the process is completed, follow up with them to receive your clearance certificate as soon as possible.

No. The entire process can be handled over the phone and via email. Therefore, you can contact us no matter where you live in South Africa.

What Happens After Debt Review?

It’s important to understand what happens once you’ve completed the process. If you were wondering, there is life after debt review! We can confidently say that you will be in a much better financial position once you’ve paid off all your debt.

If you’ve completed the process, congratulations! You’ve made a wise decision and have cleared your debt. To help you understand what to expect after the process, we’ve provided information to answer two of your biggest questions.

What Happens After the Debt Review Process?

When the process begins, Skuldhulp notifies all credit bureaus and credit providers that you are under debt review. The credit bureaus then flag your profile as "under debt review." While your profile is flagged, you do not qualify to take out any more credit. This is to ensure that you can settle your debt effectively without the burden of new debt.

After completing the process, meaning all your debt is fully paid off, a clearance certificate will be issued to you. This certificate is known as Form 19.

Your debt counsellor will then notify the credit bureaus that you are debt-free! They are legally required by the National Credit Act to remove the "under debt review" flag from your credit profile within 21 working days after being notified that you are no longer under debt review.

Can You Apply for Credit After Debt Review?

Yes. Once the flag is removed, you can apply for credit again and make purchases, such as for a house or car, under credit. You will not be denied simply because you were once under debt review. However, you will need to rebuild your credit score, just like anyone else who applies for credit.

Find out how to check if your name is still flagged under debt review.

Our fees are regulated by the National Credit Regulator and are very reasonable, as the goal is to help you get out of debt. The fees will be explained to you in detail once you contact us. The important thing to remember is that all fees are included in your affordable debt repayment plan.

No. We never contact clients at work unless specifically requested to do so.

To be placed under debt review, you need to have a monthly income that allows you to make a reasonable offer to your credit providers. Therefore, if you are unemployed and receive no other income, such as rental income or a pension, debt review may not be the ideal solution for you. However, there are other solutions available that could be beneficial, so you can still contact us for assistance.

Once you apply for debt review with Skuldhulp, we will notify all your credit providers within 5 days (usually in less than 48 hours) that you are under debt review. By law, they must then communicate with your debt counsellor and not directly with you. Unfortunately, some credit providers may occasionally try to contact clients directly. If this happens, you can simply refer them to your debt counsellor, who will handle the matter on your behalf.

Yes, you can still contact us. There may be other ways to assist you. The sooner you reach out to us, the better our chances are of finding a workable solution for you.

While you are under debt review, a flag will be placed on your name at the Credit Bureaus, indicating that you are under debt review. Once you have met all your debt obligations, we will instruct the Credit Bureaus to remove the flag, and there will be no indication that you were ever under debt review.

However, if you don’t apply for debt review, your situation could become much worse. If you skip monthly payments on any of your credit agreements, whether it’s a bond or a simple clothing account, it will be listed as non-payment.

For the purpose of obtaining credit in the future when you are back on your feet, it’s better to choose debt review rather than juggling your credit providers by paying them less than your original instalments or not paying everyone on time.

No. In fact, debt review helps to save your house and vehicle. However, it will depend on your unique circumstances. Factors that will determine this include:

• Have you received a Section 129 notice from your credit provider, and if so, how long ago? If you have received a Section 129 notice from your credit provider, you will have 10 working days to obtain the services of a debt counsellor, who will attempt to save your assets.

• Have you been served with a summons regarding your bond or vehicle finance?

• How many vehicles do you have, and what are they used for? For example, quad bikes and jet skis may be considered luxury vehicles and might need to be returned to the bank.

• Are you fully cooperating with the debt review program?

The bottom line is that you will always be in a better position to keep your house and vehicle while under debt review than if you were trying to negotiate with creditors on your own.

You will immediately experience the relief that debt review offers. Within the first 5 days, we will create an affordable provisional repayment plan for you. According to this provisional plan, you will make a single monthly payment to a Payment Distribution Agency (PDA), which will distribute the funds according to your plan. Your credit providers will not be allowed to take action against you during the first 60 working days. During this time, we will finalise your repayment plan.