Comprehensive Process Guide

How Does Debt Review Work in South Africa?

Debt review works by systematically restructuring a consumer's credit agreements under Section 86 of the National Credit Act. A registered debt counsellor recalculates an affordable monthly budget, proposes revised repayment terms to credit providers, obtains a court order to make the plan legally binding, and distributes one monthly instalment through an accredited Payment Distribution Agency.

By Carolina Guevara Harris (NCRDC3152)•Updated for 2025•8 min read

Step 1: Free Financial Assessment & Form 16 Application

You provide Debt Guidance with your recent payslips, bank statements, and list of creditors. Our registered debt counselling team performs a detailed income and expenditure analysis. If you wish to proceed, you sign an official Form 16 application under the National Credit Act.

Key Outcome: You establish whether you meet the statutory definition of over-indebtedness.

Step 2: Creditor Notification (Form 17.1) & Bureau Listing

Within 5 business days of your application, your debt counsellor issues Form 17.1 to all your credit providers and notifies the National Credit Regulator (NCR) and credit bureaux. This immediately signals that you are undergoing formal debt review.

Key Outcome: Credit providers are formally notified to provide exact certificate-of-balance figures.

Step 3: Restructuring Proposal & Creditor Negotiations (Form 17.2)

Your debt counsellor issues Form 17.2, confirming that you are over-indebted. A formal restructuring proposal is generated using the Debt Counselling Rules System (DCRS). This proposal details revised repayment terms, reduced interest rates, and extended repayment periods.

Key Outcome: Unaffordable monthly debt commitments are replaced by a realistic, single monthly instalment.

Step 4: Court Order & Payment Distribution (PDA)

The restructuring plan is presented to the Magistrates Court or the National Consumer Tribunal (NCT) for a formal consent order. You begin making your single monthly payment to an NCR-accredited Payment Distribution Agency (PDA), which legally distributes the exact agreed portions to each credit provider.

Key Outcome: You enjoy full statutory legal protection against repossession while making payments.

Step 5: Completion & Clearance Certificate (Form 19)

Once all restructured unsecured debts and vehicle finance agreements are settled in full, your debt counsellor issues your Form 19 Clearance Certificate under Section 71 of the NCA. The debt review listing is completely removed from all credit bureaux within 21 business days.

Key Outcome: You are fully debt-free with a clean credit record, having avoided bankruptcy or blacklisting.

Who Qualifies for Debt Review? →How Much Does Debt Review Cost? →Clearance Certificates Guide →

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