Introduction

Debt problems affect many households in South Africa. Missed payments lead to collection calls, legal threats, and financial stress. Debt review provides a legal solution for people who struggle with repayments.

Debt review places your debt under the supervision of a registered debt counsellor. The counsellor reviews income, expenses, and credit agreements. A structured repayment plan then replaces existing payments.

This guide explains how debt review works step by step.

Step 1. Apply for Debt Review

The process begins with an application to a registered debt counsellor.

You submit financial information such as:

• Income statements

• Bank statements

• Credit agreements

• Monthly living expenses

• Account balances

The counsellor uses this information to review financial pressure.

Accuracy matters during this stage. Incorrect details lead to delays or rejection.

Step 2. Financial Assessment

The debt counsellor evaluates income and expenses.

The goal involves determining whether debt repayments exceed financial capacity.

The counsellor calculates:

• Total monthly income

• Essential living expenses

• Total debt repayments

A person qualifies as over indebted when income does not cover both living expenses and debt obligations.

The assessment forms the foundation of the entire process.

Step 3. Notification to Credit Providers

Once the counsellor confirms over indebted status, credit providers receive official notification.

Credit providers include banks, lenders, retailers, and vehicle finance companies.

The notification informs creditors about the debt review application.

Credit bureaus also receive notification. The credit profile then shows debt review status.

Credit providers must pause collection actions during the review period.

Step 4. Development of a New Repayment Plan

The counsellor creates a revised repayment plan.

The plan restructures existing debt into one manageable monthly payment.

Changes often include:

• Reduced monthly installments

• Extended repayment terms

• Adjusted interest structures in certain cases

The repayment plan focuses on affordability.

The goal involves allowing you to pay debt without sacrificing basic living expenses.

Step 5. Proposal Sent to Creditors

The counsellor sends the new repayment proposal to all creditors.

Each creditor reviews the proposed payment structure.

Credit providers evaluate:

• Repayment amount

• Repayment duration

• Interest adjustments

Many creditors accept the proposal because the process ensures repayment rather than default.

Negotiations occur if creditors request adjustments.

Step 6. Court or Tribunal Approval

A court or tribunal must approve the repayment plan.

Legal approval converts the plan into a binding agreement.

Once approved, the repayment plan becomes enforceable.

Creditors must follow the terms of the order.

This stage creates legal protection for the consumer.

Step 7. Monthly Payment Through a Payment Distribution Agency

You make one monthly payment to a payment distribution agency.

The agency distributes payments to creditors according to the approved plan.

Benefits of this structure include:

• One payment instead of multiple payments

• Transparent distribution records

• Reduced administrative stress

The agency ensures every creditor receives the correct portion.

Step 8. Debt Repayment Period

You continue making monthly payments until debt balances reach zero.

The duration depends on:

• Total debt amount

• Monthly payment size

• Interest terms

• Number of accounts included

Many repayment plans last three to five years.

Consistent payments remain important during this stage.

Missed payments place the process at risk.

What Happens If Payments Stop

Debt review protection applies while payments continue.

Missed payments lead to serious consequences.

Possible outcomes include:

• Termination of the debt review process

• Legal action from creditors

• Repossession of financed assets

Financial discipline protects the process.

Many counsellors monitor payment progress and provide guidance when problems arise.

How Debt Review Helps Consumers

Debt review creates structure and protection.

Key benefits include:

• Lower monthly repayments

• Protection from legal action

• Professional debt management support

• Clear repayment timeline

Consumers regain control over finances while repaying debt responsibly.

Final Thoughts

Debt review works through a structured legal process.

A debt counsellor reviews finances, negotiates with creditors, and establishes an affordable repayment plan. Court approval creates legal protection while the repayment plan remains active.

The process helps consumers repay debt in a controlled and manageable way.