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Supplementing household income with credit products such as loans and credit card purchases to make ends meet is a devastating and demoralizing reality for far too many consumers. Millions of consumers are in financial dire-straights and have trouble keeping up with escalating living costs whilst repaying credit.

If this picture sounds familiar, you might be over-indebted. Over-indebtedness is defined as “when a consumer is unable to repay all financial obligations in a timely manner and/or where total debt repayments exceed net income (“take-home pay”) after living expenses have been paid for.”

Statutory debt counselling is designed to provide over-indebted consumers with an alternative to the traditional remedies for defaulting on your debt: administration and sequestration.

Debt counselling is one of the debt relief measures available in South Africa, introduced by the National Credit Act (NCA) in 2007 and is intended to assist over-indebted consumers struggling with debt through budget advice, negotiation with credit providers for reduced payments and restructuring of debts.

To restructure a credit repayment via debt review, a credit provider may not have served a summons on you yet. In the event that summons had been served, it is not the end of the road. The National Credit Act affords a consumer even at point of summons, the opportunity that the Court adjudicating over the credit provider’s judgment proceedings instituted against you pertaining a credit agreement, to refer and order that credit agreement back to a debt counsellor to have it restructured under debt review.

This is a great process for anyone with an income and struggling to meet their monthly obligations. The process is quite straightforward, and with the help of a qualified debt counsellor, mostly hassle-free.


The process starts with providing your Debt Counsellor with details of your income, monthly budget and debt commitments to establish if you are in fact over-indebted. Once it is certain that you do need help with your debt, you’ll be given a new budget designed around a new repayment plan. On acceptance of the budget, your Counsellor will contact your creditors to negotiate a repayment plan on your behalf. Debt review is a legal process, and the restructuring court order makes the new payment plan binding and all credit providers must adhere to the court order. This protects you from potential increases in monthly instalments and commits you to meeting the new repayment plan.Once you have repaid your debt, or only remain with a Mortgage or Vehicle agreement, you can request your Debt Counsellor to issue a Clearance Certificate. Even though this allows you to apply for credit again, think twice and remember what got you into hot water in the first place. The old restructure monthly debt review instalment should assist you as a reference and guide to you on what you will be able to afford in repaying new future debt.


The advantages of being under debt counselling includes –

  • You have legal protection from credit providers;
  • You pay a reduced amount on your debt;
  • Credit providers won’t harass you anymore;
  • A Clearance Certificate is issued on repayment of your debt and your credit record will be updated within 48 hours from issuing thereof;
  • The cost implication is very low and prescribed;
  • None of your assets will be sold;
  • The repayment plan is based on funds available after essential household expenses have been paid;
  • Debt counselling is not an act of insolvency and do not affect your status.

The disadvantages to being under debt counselling includes –

  • Not being able to incur any further debt while being under debt counselling;
  • You are liable for prescribed fees of the Debt Counsellor as well as any other legal fees;
  • You cannot cancel the debt counselling whilst you are still over-indebted;
  • Your credit record is affected until date of Clearance Certificate is issued by the Debt Counsellor.

It is not a dishonour to seek professional affordable assistance – it is vital that consumers take control of their financial disposition pro-actively.

If you think that you might be over-indebted, rather seek a professional opinion and get the necessary assistance to help you regain a healthy financial position. Credit has a snowball effect which can leave a devastating effect if not acted on in time.

Synergy³ Solutions provides professional debt solutions to persons who might need assistance with debt counselling. You may contact Deon Els at 061 313 7460 or deon.els@gmail.com for any debt related queries.

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