Sep 2020 2nd edition

Debt counselling: Keep your assets!

Written by Allison Cooper

While many South Africans are struggling financially, as a result of the economy and the effects of the coronavirus, debt counselling can help them to pay their debt and make sure that they do not lose their assets, such as their house, car or furniture. 

Debt counselling was introduced in the National Credit Act. It helps people who are struggling to pay their debts, by restructuring them to make repayments easier, says Advocate Kedilatile Legodi, the Acting Manager: Education and Communication at the National Credit Regulator (NCR).

“It also gives consumers an opportunity to start fresh and build a clean credit record,” she adds. 

Debt counselling helps people to repay their debt, without borrowing money. And, if you apply before credit providers take legal action against you, your assets will not  be taken away if you make repayments until your debt is paid.

Other benefits include:

  • Living expenses such as groceries and school fees, are taken into account before you are told what to pay.
  • A registered debt counsellor negotiates reduced repayments with creditors.
  • Debt restructuring is approved by a magistrate court or the National Consumer Tribunal, so the repayment term is fixed.
  • There is no limit to the amount of debt that can be placed under debt counselling.
  • If your short-term debt is paid in full and your home loan payments are up to date, you will be issued with a clearance certificate. Your credit record will be cleared and you can start fresh.

What you need to know

To apply for debt counselling, a consumer must have an income. You also cannot go under debt counselling if you are still under debt administration.

“Once you apply for debt counselling, you will not get any further credit and your name will be flagged at the credit bureaus. This is not a listing, but an indicator that you have applied for debt counselling,” says Legodi.

She adds that people must ensure they receive a comprehensive explanation from the debt counsellor and understand the process, before they sign and accept the application. You must also know who your debt counsellor is (name and NCR registration number); what the consequences are; how your debt is going to be restructured; the cost involved; and what your rights and obligations are.

Debt counselling is offered by NCR-registered debt counsellors, but the service is not free. For more information and to get assistance from the NCR, visit or call 0860 627 627.

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