Debt counselling, also known as debt review, is a formal legal process in South Africa designed to help over-indebted consumers restructure their debt repayments. A qualified Debt Counsellor assesses your financial situation, negotiates with your creditors for reduced monthly payments and interest rates, and creates a consolidated, affordable repayment plan. This process provides legal protection against debt collectors and asset repossession while you pay off your debts.

You are typically eligible for debt counselling if you are over-indebted, meaning you cannot meet your monthly debt obligations. This process is suitable for individuals with a regular income who are struggling to pay their loans, credit cards, store accounts, and other debts. A Debt Counsellor will conduct a thorough assessment to determine if debt counselling is the right solution for your specific financial situation.

The duration of the debt counselling process varies depending on the total amount of debt you have, your repayment capacity, and the agreements reached with your creditors. The goal is to settle all your restructured debts, which could take anywhere from 2 to 5 years, sometimes longer for very large debts like a home loan. Once your debts are paid off, you receive a clearance certificate.

Initially, yes, your credit report will show that you are under debt review. This means you won't be able to incur new debt during the process. However, the long-term effect is positive. By successfully completing the debt counselling program and receiving your clearance certificate, you demonstrate responsible debt management. This allows you to start rebuilding a healthy credit profile once you are debt-free.