What you need to know about debt counselling in South Africa

If you’re drowning in debt and can’t keep up with monthly payments, you’re not alone.

Every year, the demand for debt counselling (also known as debt review) grows – in 2025, it rose 47% compared to 2024, according to DebtBusters’ Q3 2025 Debt Index.

If you’re overindebted – meaning your expenses and debt repayments are greater than your income – debt counselling can be a lifeline. Introduced through the National Credit Act (NCA), it’s a legal, structured debt review process that helps you take back financial control with the support of a qualified debt expert.

DebtBusters has helped thousands of South Africans reduce their debt through the legal process of debt counselling. Most DebtBusters clients can reduce their monthly debt payments by 30-50%, providing immediate financial relief.

Debt counselling covers both unsecured debt (like credit cards, personal loans, and store accounts) and secured debt (such as home loans and vehicle finance).

When you enter debt counselling, all the credit included in your plan is restructured into one manageable monthly payment. That payment is then distributed to each of your credit providers – secured and unsecured alike – according to the agreed plan.

This ensures every debt is handled responsibly, while giving you the financial breathing room, stability, and peace of mind you need to regain control.

In terms of section 71 of the NCA, a debt counsellor may issue a clearance certificate once all unsecured credit agreements (and any other non-mortgage agreements) included in debt review are fully settled.

The history of debt counselling in South Africa

Debt counselling in South Africa was formally introduced in 2007, following the implementation of the National Credit Act (NCA) 34 of 2005. This marked a major shift in consumer credit protection and laid the foundation for today’s debt review process.

Before the NCA, consumers had limited protection when dealing with credit providers. The Usury Act (73 of 1968) and the Credit Agreements Act (75 of 1980) regulated certain lending practices but did little to prevent reckless lending, excessive interest charges, or aggressive debt collection.

As a result, many overindebted South Africans were exposed to predatory lending and unaffordable repayment terms, with few legal remedies available.

The NCA introduced compulsory affordability assessments, prohibited reckless lending, and created a formal, legally protected debt relief process known as debt counselling. This process allows you to restructure your debt into affordable repayments while receiving protection from legal action.

Debt counselling in South Africa is governed by strict ethical and regulatory standards and must be conducted by debt counsellors registered with the National Credit Regulator (NCR).

Key milestones in the history of debt counselling

• Pre-2007:
  Limited consumer protection, no compulsory affordability checks, and widespread predatory lending.
• 2007:
  The National Credit Act (NCA) came into effect, legalising debt counselling and establishing the National Credit Regulator (NCR).
• 2007:
  DebtBusters launched as one of South Africa’s first registered debt counsellors.
• 2015:
  Amendments to the NCA and updated affordability regulations strengthened enforcement and oversight.
• 2025:
  Since its introduction, thousands of South Africans have completed the debt review process and exited debt-free. DebtBusters’ Debt Index records the highest level of consumer interest in debt review to date, reflecting its role as a mainstream financial tool.

Debt counselling today

Today, debt counselling is a well-established part of South Africa’s credit system.

The National Credit Regulator (NCR) regulates more than 1,700 registered debt counsellors, monitors compliance with the National Credit Act (NCA), and enforces ethical standards across the industry. This oversight helps protect you from scams, unregistered operators, and misleading debt relief claims.

Always verify that a debt counsellor is registered with the NCR before signing up.

Who can apply for debt counselling?

There are a few qualifying criteria that need to be met for your debt review application to be accepted:

• You must be a legal adult (over 18 years of age).
• You must be earning a consistent income – bank statements must be supplied as proof of this.
• Your credit agreements must be with South African credit providers.
• If you are married in community of property, you and your spouse must make a joint application to enter debt counselling.
• If you have already been sequestrated, you will not qualify. Sequestration is a legal process where a court declares you insolvent and appoints a trustee to take control of your finances so you can repay your creditors. 

Who can’t apply for debt counselling? 

While debt counselling is a helpful solution for many overindebted South Africans, it’s not suitable for everyone.

The following situations generally disqualify you:

• You have irregular income. Inconsistent income can make it difficult for a debt counsellor to structure affordable monthly payments. In these cases, alternatives such as debt consolidation may be more appropriate. Learn more about debt consolidation.
• You are already sequestrated or under administration. If your finances are legally managed by a trustee or administrator, debt counselling is not possible.
• You are unemployed. Without a regular income, you cannot meet or afford structured repayments under debt counselling. However, you can still monitor your credit and plan for future debt relief options.
• Your account is under legal action. Debt counselling can only include accounts where no legal action has started yet. Once a creditor has issued a summons on a specific debt, that account can no longer form part of the debt counselling process and must be handled separately. Before a summons is issued, you will usually receive a Section 129 Notice (also known as a letter of demand). This notice is a final warning that your account is at serious risk of being taken to court (but does not constitute legal action). Think of it as your last wake‑up call – the point where urgent action is needed. If you receive a Section 129 Notice, it’s essential to contact DebtBusters immediately. Acting quickly at this stage gives us the best chance to include the account in debt counselling before legal action begins.

Real-world examples

• Xoliswa: Earns R18,000 per month and owes R250,000 across five credit cards and two personal loans. She qualifies for debt counselling.
• John: Self-employed with a monthly income fluctuating between R5,000 and R40,000. He may qualify for traditional debt review, as long as he can prove he earns enough, on average, to cover his living expenses and a restructured debt amount. However, he could also explore alternative debt solutions.

What is the debt review process in South Africa?

The debt review process follows a clear, legally defined structure. With the guidance of a registered debt counsellor, everything should be smooth sailing.

Step 1: Financial assessment

When you contact a debt counsellor, they will assess your income, expenses, and credit agreements to determine whether you’re overindebted.

Using your credit report from the credit bureaus, the debt counsellor calculates your debt-to-income ratio to determine whether you qualify for debt counselling and can enter the debt review process.

For example, if you earn R20,000 and pay R18,000 towards debt each month, your debt-to-income ratio is 90%, which is not sustainable. DebtBusters aims to reduce this to around 30-40%. Read our Q4 2024 Debt Index report to see how other South Africans are managing their debt.

The assessment process takes about 24-48 hours. To be assessed, you’ll need your South African identity document, three months’ bank statements, payslips, and details of any credit agreements.

You can also apply for debt counselling as a non-South African resident, provided you have a valid passport, a permanent job in South Africa, and proof of income – but you would need to have taken out the debt in South Africa.

Step 2: Negotiation with credit providers

Legal protection is in place once your credit providers have accepted your application for debt counselling. From that point, they must cease all legal action and collection activities, and may not repossess your assets.

Your debt counsellor then negotiates reduced interest rates and revised repayment terms, helping to lower your monthly payments while keeping your accounts up to date.

As South Africa’s largest debt counsellor, we have established relationships with all major banks and credit providers, giving us far greater negotiating power than individual counsellors. Typically, interest rates can be reduced from around 21% to as low as 3-8%, with monthly repayments reduced by 30-50%, depending on your circumstances.

Step 3: A restructured repayment plan

Your debt counsellor creates a personalised repayment plan based on what you can realistically afford as part of your debt review process. This plan is submitted to the Magistrate’s Court or National Consumer Tribunal. Once an order is granted, you are obliged to pay every month to reap the benefits of the lowered instalment and interest rate negotiated on your behalf.

At DebtBusters, you make one affordable monthly payment to a registered payment distribution agency (PDA), which then distributes the funds to each of your credit providers. We work with Hyphen, a well-established, reputable PDA, to ensure payments are handled securely and transparently.

As part of the process, we also create a realistic household budget that clearly shows how much you have available for living expenses after your debt repayments are deducted.

Approval and implementation

Once the plan is approved, repayments begin. Your credit profile will reflect that you are under debt review, which means you cannot take on new credit until the process is completed.  

DebtBusters supports you by helping you with a budget to guide your monthly spending. You will have access to the client portal 24/7 to track your payments, view your progress, and contact your support team for assistance.                                                                                                    

What are the benefits of debt counselling?

If you’re overindebted, debt counselling in South Africa offers several important benefits.  

1. Lower monthly repayments

Reduced interest rates and extended repayment terms help lower your total monthly payment.

2. Less financial stress

One structured monthly payment to manage, plus legal protection from creditor pressure, gives you real peace of mind.

Many clients say there are no more sleepless nights worrying about which creditor to pay first. As one client, Erica from Cape Town, puts it: “I finally feel like I can breathe again.”

Read more client testimonials about DebtBusters.

3. Protection against legal action

The National Credit Act protects you from repossession, legal action, and wage garnishment – where a portion of your salary is legally taken to pay creditors – while you follow your repayment plan.

Learn more about legal protection under debt counselling.

4. Improved credit score

Once you start making payments, you can expect your credit score to start improving. However, this won’t happen immediately as you’re listed as being under debt counselling.

Once you’ve paid off your debt and received your clearance certificate, the debt review flag will be removed from your credit report. You can then rebuild your credit score through responsible credit use.

You don’t need to pay off your mortgage to exit debt counselling. Once your unsecured debts are cleared and your home loan is paid up to date, you can receive your clearance certificate. However, the original terms of your home loan will apply once again.

5. Financial education and counselling

DebtBusters provides you with access to a range of financial tools to improve your money management.

These include budgeting tools, articles to improve your financial literacy, and access to the latest DebtBusters media coverage.

DebtBusters clients who use these tools have better money management skills after completing debt counselling.

How does DebtBusters help those in debt?

Choosing the right provider for debt counselling in South Africa is essential to long-term success. DebtBusters is a trusted, NCR-registered debt counsellor with a proven track record of helping South Africans bust debt for good.  

Why DebtBusters? 

DebtBusters is South Africa’s largest debt counsellor and offers support via phone, email, WhatsApp, online chat, and a 24/7 client portal, where you can track payments, view your remaining balance, and see your debt-free date.

DebtBusters combines expertise, accessibility, and genuine care to help you take control of your finances and achieve lasting freedom.

How long will the debt counselling process take?

The length of the debt review process depends on your financial situation and total debt amount.

DebtBusters’ debt counselling process is aimed at ensuring clients become debt-free. While there is no guarantee you’ll be debt-free within a certain period of time, you can accelerate the process in the following ways:

• If your financial situation improves, you can make lump-sum payments.
• If you receive a salary increase, a bonus, or an inheritance, you will be able to pay off your debt faster.

There are no penalties for early completion.

Clients may be able to complete the process in anything from 24 to 60 months, but those with large amounts of debt, including large home loans, may take longer.