NCA Section 86 Debt Review: Qualifying, Costs, and Exiting

Section 86 debt review is the process under the National Credit Act that lets an over-indebted consumer apply, through a registered debt counsellor, to have monthly credit repayments restructured and confirmed by a court order. While the application is running and after the order is granted, your creditors cannot sue you or repossess assets covered by the review, provided you keep to the new payment plan.¹

Who Qualifies

The threshold is over-indebtedness, defined in Section 79 of the Act. You meet it if the evidence shows you cannot satisfy all your credit agreement obligations on time, weighed against your income, expenses, future prospects, and repayment history.² In practical terms, if your credit repayments exceed what remains after your basic living costs, you likely qualify.

Debt review covers credit agreements that fall under the NCA: most personal loans, credit cards, vehicle finance, home loans, and retail accounts. Some juristic-person agreements above set thresholds and certain specialised contracts fall outside the Act, and your counsellor will confirm which of your accounts can be included.

Timing matters. If a credit provider has already begun legal proceedings to enforce a specific agreement, that agreement generally cannot be pulled into your debt review. Applying before any creditor issues a summons gives you the widest protection.

Documents You Need to Apply

The application is made on Form 16, which you complete with your debt counsellor. It runs to four parts: personal details, income, monthly living expenses, and every debt you owe.³ Bring the following to your first appointment:

A valid South African ID, or a passport if you are a foreign national working legally.
Your latest payslip or salary advice. If you are self-employed, bring recent bank statements showing deposits.
A full list of creditors with account numbers, outstanding balances, and monthly instalments for every loan, credit card, and store account.
A monthly expense breakdown covering rent or bond, utilities, groceries, transport, school fees, medical costs, and any other recurring items.
Bank statements, usually for the previous three months, so the counsellor can verify income and spending.

If supporting documents are still missing ten days after the counsellor receives your Form 16, the application will not be accepted.³ Understating expenses or inflating income will only produce a repayment plan you cannot sustain.

Working With a Registered Debt Counsellor

You must apply through a debt counsellor registered with the National Credit Regulator. The NCR publishes a searchable register, and it is worth checking a counsellor’s status before you engage them.⁴ An unregistered person cannot lawfully take you through the process, and any restructuring they arrange will have no legal footing.

Once you submit Form 16 and the supporting documents, the counsellor verifies your debts with each credit provider, calculates your disposable income, and tests you against the over-indebtedness threshold. The assessment reaches one of three outcomes: you are not over-indebted and the application is rejected; you are heading in that direction and the counsellor recommends a voluntary arrangement with your creditors; or you are over-indebted and a formal restructuring proposal is prepared for court.¹

Notification of Creditors and the Enforcement Moratorium

Within five business days of receiving your application, the debt counsellor must send a Form 17.1 to every credit provider listed and to every registered credit bureau.⁵ That deadline, set by Regulation 24(2), triggers the protections that make debt review worthwhile.⁶

Under Section 88(3), once creditors have that notification they cannot start new legal proceedings or continue existing litigation on debts covered by the review. If a creditor tries anyway, the court must dismiss the matter as long as you are complying with the process. Credit bureaus flag your profile as under debt review, which also blocks you from taking on new credit for the duration.

Debit Orders and Payroll Deductions

Existing debit orders and payroll deductions often keep running in the first weeks after you apply, which can wreck the budget the counsellor has just built. Once a credit provider receives the Form 17.2 with the counsellor’s rearrangement proposal, it must cancel all debit orders and payroll deductions within three days.⁶

Credit providers are also barred from applying set-off against salary deposits or credit balances in your bank account once they have the rearrangement proposal, including on payday loans and short-cycle small credit agreements. If a creditor does not cancel within the three-day window, your counsellor can report the non-compliance to the NCR.

The 60-Day Termination Risk

Debt review runs on a clock that many consumers do not know about. Under Section 86(10), any credit provider whose agreement is in default may terminate the review at any time from 60 business days after you applied. The termination notice goes to you, the debt counsellor, and the NCR.¹ This is where cases fall apart when the counsellor moves too slowly.

The termination right only exists while the matter is still with the counsellor. Once the restructuring proposal has been referred to the Magistrate’s Court for a hearing, a Section 86(10) notice is no longer valid. The task is to file with the court before any creditor pulls the trigger at day 60. If a creditor does validly terminate for a specific agreement, they can enforce it through the normal courts, and losing a large account, particularly vehicle finance, can destabilise the rest of the plan.

Getting the Restructuring Order

When the counsellor confirms you are over-indebted, the proposed plan has to become a court order. There are two routes.

Consent Order

If every affected credit provider agrees to the proposal, the counsellor files the arrangement with the Magistrate’s Court as a consent order under Section 138. The court reviews it for basic compliance and grants it without a contested hearing. In practice this covers most successful outcomes, because the counsellor negotiates reduced interest rates and extended terms that creditors will accept.

Court-Ordered Restructuring

If one or more creditors reject the proposal, the counsellor refers the matter under Section 86(7)(c) to the Magistrate’s Court or the National Consumer Tribunal. A magistrate weighs whether the plan is fair to both sides and can modify the terms before granting the order, or reject the proposal if you are not actually over-indebted or the terms are unreasonable.¹

Once the order is in place, you stop paying creditors individually. You make one monthly payment to a registered Payment Distribution Agent, which splits the funds among your creditors according to the order. The PDA has to be operationally independent from your counsellor’s business.

Reckless Credit

During the assessment, your counsellor may also investigate whether any of your credit agreements were granted recklessly. A lender is reckless where it failed to properly assess affordability before approving the loan. You can specifically ask for a reckless lending investigation on any agreement you are concerned about.⁷

Not every agreement is open to challenge on these grounds. Pre-1 June 2007 agreements, student and school loans, emergency loans, public interest agreements, pawn transactions, incidental credit, temporary credit limit increases, certain developmental credit agreements, and some subsidised home loans are excluded. Where reckless credit is proven, a court can suspend the agreement or set aside its interest and fees, which can materially reduce your debt.

What Debt Review Costs

Debt counsellor fees are capped by the NCR:

Application fee: R50 excluding VAT, paid to the counsellor with your Form 16.
Rejection fee: R300 excluding VAT if the application is rejected because you are not over-indebted.
Restructuring fee: the lesser of your first restructured instalment or R6,000 excluding VAT. A joint application is capped at the same R6,000.
Monthly aftercare fee: 5% of the monthly instalment, capped at R400 excluding VAT, for the first 24 months. After that it drops to 3%, still capped at R400.

These are maximums under the NCR guidelines and all figures exclude VAT.⁸ Legal costs for the court application are usually built into the restructured plan rather than charged upfront, but confirm this with the counsellor before signing.

If You Default on the Restructured Payments

The moratorium on enforcement depends on you keeping up with the restructured payments. If you default on the court-ordered instalments, creditors can enforce the original terms of their agreements without sending a Section 86(10) termination notice and without the usual Section 129 pre-enforcement notice. The order holds the original agreements in suspension; it does not rewrite them.

Missed payments give creditors a direct path back to repossession and judgment. If you see a payment problem coming, contact your counsellor before you fall into arrears, because adjustments are sometimes possible while the plan is still current.

Exiting Debt Review

Clearance Certificate

The formal exit is a clearance certificate on Form 19, issued by your counsellor under Section 71 of the NCA. You qualify once you have paid off all your debts in full, with the single exception that your home loan need only be up to date rather than fully settled. The counsellor must issue the certificate within seven days of you meeting that standard, and once the credit bureaus receive it they have up to 21 business days to remove the debt review flag from your profile.⁹

You Cannot Simply Withdraw

The NCA does not provide a voluntary withdrawal process once you have applied in the prescribed manner. The NCR’s 2021 Withdrawal Guidelines state that consumers, counsellors, or credit providers who take part in an informal “voluntary withdrawal” expose themselves to legal and compliance risks.⁹

There is one narrow window. Before the Magistrate’s Court grants the restructuring order, you can put new facts to the court showing you are no longer over-indebted and can afford your contractual repayments, including arrears. If the court accepts that, the counsellor’s proposal falls away and the review ends. After the order is granted, the clearance certificate is the only way out.

1
The Department of Trade, Industry and Competition. National Credit Act 34 of 2005
2
LawLibrary. National Credit Act 2005 – 79. Over-indebtedness
3
National Credit Regulator. Form 16 – Application for Debt Review
4
National Credit Regulator. Register of Registered Debt Counsellors
5
National Credit Regulator. Form 17.1 – Notification to Credit Provider and Credit Bureau
6
National Credit Regulator. Guideline on Credit Provider Debit Order and Payroll Deduction Cancellations
7
National Credit Regulator. Suspected Reckless Lending Investigation Guidelines 2025
8
National Credit Regulator. Updated Fee Guidelines for Debt Counsellors
9
National Credit Regulator. National Credit Regulator Withdrawal from Debt Review Guidelines