Debt Review: How It Works and How to Get Out of It

What is Debt Review?

Debt review (debt counselling) is a legal process introduced by the National Credit Act to help over-indebted consumers. A Debt Counsellor negotiates with your creditors to lower your monthly payments and extend your repayment terms.

The Pros

• Asset Protection: Creditors cannot take legal action against you (repossess your car or house) while you are under review.
• One Payment: You pay one consolidated amount to a Payment Distribution Agency (PDA).
• Lower Installments: Monthly cash flow relief.

The Cons

• No New Credit: You cannot apply for loans, credit cards, or store accounts while under debt review.
• Flagged Profile: Your credit record is flagged at the bureaus.

How to Get Out of Debt Review

This is a common problem. Once you are under debt review, you cannot just "cancel" it because you changed your mind.

You can only exit if:

1. You pay off all debts: Once all listed debts are paid, the Counsellor issues a Clearance Certificate (Form 19).
2. Court Order: If you were declared over-indebted by a court order, you need a court application to rescind it (though this is legally difficult and strict).

Warning: Be wary of companies promising to "remove debt review flags" for a quick fee. This is often a scam.