The National Credit Act (NCA) came into full effect on 1 June 2007. Before this event, people in serious financial difficulty had only two ways to rectify their financial situation, namely:


The NCA created a third option, Debt Review and Restructuring, which is more empowering and less traumatic for the person in financial trouble. The NCA stipulates that Debt Review and Restructuring can only be performed by a Debt Counsellor (DC).

There are two phases to your application:
A - The Debt Review Application which is performed by a registered debt counsellor
B - The Application to Court - which in most cases is performed by an independent attorney

The initial phase of the process will include a consultation session between yourself and the debt counsellor. The debt counsellor will conduct a complete analysis of your income and expenditure. The expenditure is broken down into two categories i.e. your monthly variable expense which contains items such as your monthly groceries, insurances, school fees, lights and water etc. The second category is all your creditor payments. It is off outmost importance that you are honest and disclose to the debt counsellor all information during this process. This can be done on a one on one basis or alternatively communication can take effect electronically. There is a qualifying criteria to meet. If you meet the requirements, the debt counsellor would advice you that you can apply for debt counselling. This would entail you completing an application for debt review (Form 16).

Completing the application is the start of the debt counselling process towards the mandated timelines as set out on the NCA. The Act stipulates that the debt review process must be complete within sixty working days from the date of application. During this sixty day period, no legal action can be instituted against you for any accounts that may be in default.

Within this period the debt counsellor will perform the following functions:

  • Inform all your credit providers and credit bureaus of your application for debt review
  • Verify balances on your account
  • Verify that interest charges and fees are charged in accordance to the regulations of the Act
  • Verify that the credit was granted in accordance to the regulations of the Act and seek if there may be a case of reckless lending.
  • Calculate a repayment plan and submit same to credit providers
  • Negotiate with your credit providers on a suitable instalment.
  • Prepare your application to be handed over to attorney firm
  • Provide you with statements (Payment History) as requested
  • Issue a Clearance Certificate when all your accounts have been paid in full

Within Day sixty, the attorney firm must obtain a court date and notify your credit providers of the date of the court appearance.

It is extremely rare for the magistrate to request that the consumer is present in court; however it is always in your best interest to be present during the court appearance. The debt counsellor would seek a consent order from the magistrate of the court. The date of the court appearance would be dependent on the court concerned. The courts situated in the larger metropolitan areas such as Gauteng could be anything from two to three months time of registering your application in court. During this time you must ensure that you pay your credit providers in accordance to the accepted re-payment plan to avoid termination from the debt review process by your credit providers.