Debt counselling (also called debt review in South Africa) is a formal, legally-recognized process under the National Credit Act that helps people who are over-indebted to get an affordable, single monthly repayment plan and protection from legal action by creditors while the process runs. A registered debt counsellor assesses your finances, negotiates reduced monthly instalments with your credit providers and—if needed—applies for a court order to make the restructured plan enforceable. 

1. Free assessment / first contact

The consumer contacts a registered debt counsellor for an initial assessment. The counsellor will do a quick affordability check to see whether debt counselling looks suitable. Expect to be asked for ID, recent payslips, and recent statements. 

2. Formal application (Form 16) and document collection

If suitable, you complete and sign the official application (often referred to as Form 16). You must supply ID, pay slips, bank statements and account statements for every creditor. Accurate, full disclosure is essential. 

3. Debt counsellor informs creditors and credit bureaus

The debt counsellor notifies your creditors and the credit bureaus that you have applied for debt review. From the date of notification creditors are generally prevented from starting new legal action for a limited period while the application is considered (unless legal action already started). 

4. Creditors supply account info / verification

Credit providers must confirm outstanding balances, contractual details and any arrears. The counsellor uses this to calculate total debt and to draw up a realistic budget and restructuring proposal. 

5. Budget & restructuring proposal

The debt counsellor prepares a proposed payment plan that shows a single, affordable monthly instalment and how it will be distributed to creditors (often via a Payment Distribution Agent — PDA). This proposal aims to reduce monthly payments by extending terms, lowering interest rates where possible, or consolidating payments. 

6. Creditors accept / negotiate / or oppose

Creditors can accept the proposal, negotiate adjustments, or (rarely) oppose it formally. If opposition occurs, there are processes (and timelines) set out in the NCA and regulations. Most creditors engage and accept a workable restructured plan. 

7. Monthly single payment & distribution (PDA)

You pay one monthly, affordable amount to a Payment Distribution Agent (PDA) or directly as arranged; the PDA distributes funds to creditors per the agreed plan. You must keep making these payments for the duration of the plan. 

8. Completion / rehabilitation

Once all participating debts are paid according to the plan, the counsellor issues a clearance and you are removed from debt review. Your credit bureau record is updated to show completion.