Frequently Asked Questions
Get answers to common questions about debt review, credit scores, and the National Credit Act.
What is the National Credit Act?
The National Credit Act (NCA) is a law passed in South Africa to promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information.
What is Debt Counselling?
Debt Counselling is a formal legal process that provides for a consumer to be declared over-indebted and for the Debt Counsellor to negotiate a restructured payment plan and obtain a court order confirming the new repayment plan.
Who can apply for Debt Counselling?
Any consumer who is struggling to meet their monthly debt obligations can apply for debt counselling. You must have a distributable income to offer to your credit providers.
Does the NCA apply to all credit agreements?
The Act applies to most credit agreements between parties dealing at arm's length and made within, or having an effect within, South Africa. There are some exceptions, such as large agreements with juristic persons.
What is reckless lending?
Reckless lending occurs when a credit provider fails to conduct a proper affordability assessment, or enters into an agreement with a consumer who does not understand the risks, or if the agreement causes the consumer to become over-indebted.
Can I apply for more credit while under debt review?
No. While you are under debt review, you are protected from legal action by credit providers, but you are restricted from entering into any new credit agreements until you have received a Clearance Certificate.
How long does the debt review process take?
The duration depends on the amount of debt and the repayment plan negotiated. It typically lasts between 3 to 5 years. Once all debts are paid, a Clearance Certificate is issued.
What happens if a credit provider refuses the repayment plan?
If a credit provider rejects the proposed repayment plan, the Debt Counsellor can refer the matter to a Magistrate's Court to have the plan made an order of court, which binds the credit provider.