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If you are over-indebted, in other words, unable to repay all you credit agreements. Your biggest concern might be not getting dragged off to court or having all your possessions taken away. So what can you do to get out of your mess?

Debt review

Before you receive a summons for your outstanding debt you can opt for debt review. It’s important to take this option if you believe you won’t be able to pay your debts because once you receive a summons it’s too late. Debt review was introduced in 2007 with the National Credit Act (NCA).

During the first 60 business days from the date of your application to be placed in debt counselling, legal action may not be taken against you in respect of debts that are “under review”. Therefore, if you’ve opted for debt review, you don’t have to stress about someone knocking on your door, yet.

What if you don’t pay your debts?

If you decide not to go for debt review and fail to pay your outstanding debt, the creditors could take the following actions against you:

  1. Issue a summons and obtain judgement against you for the outstanding debt, interest and their legal costs;
  2. Send the sheriff to attach your property, such as your car;
  3. Instruct the sheriff to sell the attached property at an auction;
  4. Obtain a court order that your employer deduct an amount an amount from your salary and pay it over to the creditor (emolument attachment order).

Debt review process

If you decide to go for debt review, a registered debt counsellor has to first assess your financial obligations. This is basically what you have to pay every month. Some of your financial obligations may be due to reckless credit. This is when a creditor grants you credit without checking if you can afford it first. However, if you lied in your credit application, your financial obligations won’t be considered reckless credit.

If you are over-indebted the debt counsellor will draw up a repayment plan to rearrange your debt obligations. If your creditors reject the repayment plan, your debt counsellor can refer the matter to a magistrate’s court with a recommendation.

The court could make the following orders:

  1. You are not over-indebted and must continue making regular payments. If you don’t the creditor may take legal action to force you to pay.
  2. You are over-indebted and reckless credit was granted to you. The court may relieve you of some or even all of the payments under a reckless credit agreement depending on what is fair and just. The court may also postpone the date of payment under reckless credit agreements.
  3. You are over-indebted and must rearrange your payment obligation.

Hopefully, the creditors accept the repayment plan, or a magistrate’s court agrees to the repayment plan. The Payment Distribution Agent (PDA) will then channel your revised payments to your creditors. The payments are made directly to the PDA.

Once you’ve successfully paid all your debts, the debt counsellor will issue you with a clearance certificate. They will also notify the credit bureaus that you are no longer in debt counselling.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)


Arde, A. 2013. “Debt review process step by step”. IOL. [online] Available at: [Accessed 07/06/2016].

Anderson, AM. Dodd, A. Roos, MC. 2012. “Everyone’s Guide to South African Law. Third Edition”. Zebra Press.

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