Debt Review in South Africa: What It Is & How to Get Out
Introduction
Struggling with debt can feel overwhelming. If you’re drowning in overdue bills and creditor calls, debt review might seem like your only way out. But what exactly is debt review, and how can you break free from it?
Debt review is a legal process designed to help over-indebted South Africans regain financial control. While it offers protection from creditors, it also comes with restrictions. Many who enter debt review don’t fully understand how it works—or how to exit it when they’re ready.
This guide will explain everything you need to know about debt review, including how it affects your finances and the steps to get out of it for good.
What Is Debt Review?
Debt review is a legal process that helps people struggling with too much debt. It was introduced by the National Credit Act (NCA) to prevent financial ruin and reckless lending.
Under debt review:
- A debt counselor reviews your finances.
- A new, more affordable repayment plan is created.
- Creditors cannot take legal action against you.
- Your credit profile is flagged, restricting access to new credit.
While it offers relief, debt review is not a permanent solution. Many people find themselves stuck, unsure how to move forward.
Benefits vs Downsides of Debt Review
The Benefits:
- Protection from legal action – Creditors can’t seize your assets.
- Lower monthly payments – Debt counselors negotiate better terms.
- Structured repayment plan – Makes budgeting easier.
- Reduced stress – No more threatening calls from collectors.
The Downsides:
- You cannot take on new credit while under review.
- Debt review can take years to complete.
- Fees apply for debt counseling services.
- It affects your credit score until you’re fully rehabilitated.
Debt review isn’t a life sentence, but without a clear plan, it can feel like one. The key is knowing when and how to exit the process.
How to Get Out of Debt Review
Breaking free from debt review requires careful planning and financial discipline. Here’s how you can do it:
Step 1: Check Your Debt Balance
- Contact your debt counselor for an up-to-date debt settlement statement.
- Verify that all debts under review are accounted for.
Step 2: Pay Off Outstanding Debts
- If possible, settle debts early to speed up the process.
- Focus on high-interest debts first to save money.
Step 3: Obtain a Clearance Certificate
- Once all debts are paid, your debt counselor must issue a Form 19 Clearance Certificate.
- This document confirms that you are debt-free.
Step 4: Notify Credit Bureaus
- The clearance certificate is sent to major credit bureaus (TransUnion, Experian, ClearScore, etc.).
- The debt review flag is removed from your profile, restoring your access to credit.
Step 5: Rebuild Your Credit
- Start with small credit accounts, like a store card, and make payments on time.
- Keep credit utilization low—use only a portion of your credit limit.
- Monitor your credit report regularly to ensure accuracy.
Common Myths About Debt Review
Many South Africans misunderstand debt review, leading to unnecessary fear and confusion. Let’s clear up some common myths:
- “Debt Review Lasts Forever” – False. You can exit once your debts are paid.
- “You Can’t Take Out Credit for Life” – False. Once cleared, you can apply for new credit.
- “Debt Review Worsens Your Credit Score” – False. It actually protects your score from further damage by preventing missed payments.
How CDM Can Help You
At Consumer Debt Management (CDM), we specialize in helping South Africans navigate and exit debt review. Our team will :
- Assess your debt situation and provide expert advice.
- Negotiate better settlement terms with your creditors.
- Ensure smooth removal of your debt review flag from credit bureaus.
Success Story
Sarah T. was under debt review for four years, struggling to find a way out. After working with CDM, she cleared her debts in 18 months and restored her credit profile. Today, she’s financially independent and planning to buy her first home.
Regain Your Financial Freedom
Debt review can be a lifeline when you’re drowning in debt, but staying in it too long can hold you back. Understanding the process and knowing how to exit it will put you back in control of your finances.
Are you ready to move forward? CDM is here to help. Contact us today and start your journey toward a debt-free future.
Take Action Now!
- Check Your Debt Status – Request a settlement statement from your debt counselor.
- Plan Your Exit – Start paying off debts strategically.
- Restore Your Credit – Get expert guidance from CDM.
Don’t let debt review define your future. Contact CDM Today!
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