Debt Counselling, also known as Debt Review, is a legal debt relief process established under the National Credit Act 34 of 2005 and introduced in 2007. It is designed to assist consumers who are struggling to meet their monthly debt obligations. According to section 86(6), a debt counselor must assess the consumer’s level of over-indebtedness and determine how they can be assisted.

Finally, the restructuring of debts must be confirmed by the Magistrate Court or the National Consumer Tribunal (NCT) through a court order or consent order

Debt Counselling/Debt Review: This process involves negotiating a new repayment plan with your creditors for your existing debts. A flag is placed on your credit record, and you cannot take on new credit while under debt review. If you follow the debt review process and make consistent payments, you are protected by the National Credit Act (NCA) from creditors, ensuring your assets are safe and you are protected from legal action. This process provides peace of mind, knowing your monthly payments are manageable.

Debt Consolidation: This involves taking out one loan to pay off several other debts. While it may offer short-term relief, it replaces multiple debts with a single new debt, often at a higher interest rate. Debt consolidation does not provide protection under the NCA, and you can still take on more credit.

The National Credit Regulator (NCR) was established as the regulator for the South African credit industry by the National Credit Act (34 of 2005) (NCA). It is tasked with consumer education, research, policy development, registration of industry participants, investigation of complaints and enforcement of the NCA.The NCA requires the NCR to promote the development of an accessible credit market, particularly to address the needs of historically disadvantaged persons, low income persons, and remote, isolated or low density communities.The NCR registers and ensures compliance to the NCA by the following industry participants: credit providers, credit bureaus, debt counsellors, alternative dispute resolution agents and payment distribution agents.

All credit agreements must be included, except those where legal action has already been taken by the creditor. Overdraft accounts don’t show up on credit reports, so you need to disclose them to benefit from reduced interest rates and repayment amounts.Payments to service providers will be included in your monthly budget. If you have defaulted on a service account and there are interest charges on the arrears, it might be included as incidental credit. Talk to your debt counselor, who knows all about different types of accounts and financial obligations.

No, not Until your home is paid off, that’s crazy…

The time you stay under debt review depends on how much money you have to pay off your debt. The more money you can pay, the faster you’ll settle your debt. Once you’ve paid off all your unsecured debt, including your vehicle, you can exit debt review and start repaying your home loan. 

You will still receive a Clearance Certificate.

Paying extra towards your Debt Review or regular loan can help you become debt-free faster. If you have extra funds, use them to pay more than the required amount. Not all debts are paid off at the same time. Once one debt is fully paid, the extra money will go towards paying off your other debts. We encourage you to pay extra whenever possible.

Debt Review: All credit agreements are included, and you keep your assets. A court order confirms a
single reduced debt repayment. Interest rates can be lowered, and the repayment term extended. Once
all debt is paid, a Clearance Certificate is issued, removing any record of debt review. Paying extra
reduces the term and saves money.

Administration Order: For debts under R50,000. An administrator manages repayment of unsecured debt.
No assets are sold, and interest rates are not reduced. A rehabilitation order is needed to clear the
administration order once debt is paid.

Sequestration: All assets are sold to pay off debt, leaving you with no money. You cannot apply for credit,
and the record can stay on credit bureaus for up to 10 years or until a rehabilitation order is granted.

To qualify and for us to submit a repayment proposal to your creditors, you need a regular income.
If you’re married in community of property or by traditional law, you must apply jointly. If you’re married out of community of property and share debt, both of you can apply for debt counselling

The challenge is when payments stop. If you don’t make payments, your creditor can end the debt review process and might take legal action. You can only benefit from lower interest rates and a reduced repayment plan if you make full payments every month.

The National Credit Regulator (NCR) prescribes a fee and a consumer has the benefit of not having to pay this upfront. The following fees apply, but are included in your Debt Review repayment:
• Once-off Application Fee and Administrative Fee – Debtpool Does not charge you this fee
• Once-off Debt Restructuring fee for your debt counsellor
• Once-off Reckless Credit investigation fee (only when necessary and if applicable)
• Once-off Legal fee for an attorney to obtain a court order for the new debt repayment plan
• Monthly Payment Distribution Agency (PDA) fee and Debt Counsellor Aftercare fee to manage the monthly repayment

Our fee structure is transparent and any fees that can be levied are reflecting on the Form 16.