Debt Counselling

The sections of the National Credit Act No. 34 of 2005 relevant to over-indebtedness and restructuring of debt come into effect on 1 June 2007. The Act makes provision for the registration of debt-counsellors to assist over-indebted consumers. Debt counsellors are required to undergo training approved by the NCR.

 A consumer may apply to a Debt counsellor to be declared over-indebted. If the debt counsellor finds that the consumer is indeed over-indebted, he/she will make a recommendation to the Magistrate’s Court for the consumer to be declared over-indebted.  The Court may in turn re-organise the consumer’s debt by extending the term of any agreement, postponing payments, recalculating unlawful fees or interest and may order adjustments to improperly charged items. If a debt counsellor finds that a consumer is not over-indebted, he/she will provide the consumer with a letter of rejection. The consumer may then appeal to court for a review of the counsellor’s decision.

A consumer who is over-indebted may approach a debt counsellor directly, or he/she may be referred to a debt counsellor by his/her creditor/s or by the magistrate court.