Temporary Loss of Income
Temporary Loss of Income In some cases a consumer could not necessarily be over-indebted but could be experiencing or is likely to experience difficulty in satisfying all the monthly obligations under credit agreements in a timely manner. This is often the case when one of the following events occurs:
a) Reduction in monthly income as a result of a reduction in commission or the employer introducing slow time or simply a loss of regular over time.
b) Retrenchment with prospect of finding a new job.
c) Financial crisis that demands a large capital outlay that is not planned for. When one of the abovementioned happens the consumer could approach a Debt Counsellor for assistance in terms of Section 86(7)(b) of the NCA. When approached a Debt Counsellor should conduct a full financial assessment of the financial position of the consumer. If the finding is in line with section 86(7)(b), that the consumer is not over-indebted but experiencing or likely to experience difficulty to meet all his or her obligations under his or her credit agreements, the Debt Counsellor should use this assessment as a base to construct repayment proposals to Credit Providers for voluntarily consideration. If accepted by all Credit Providers a consent order can be obtained and if not the matter will be referred to a Magistrate Court for a decision. Debt Counsellors should consider a set date for the proposed review of the consumer’s financial position and include this in the proposal to Court. The motivation for this is that the consumer should be encouraged to find employment within a reasonable period which should not exceed 3 to 4 months. If no employment can be found, a general guideline is that the consumer’s debt review application cannot be supported going forward. If the consumer has been able to find employment, a new Affordability Assessment should be done by the Debt Counsellor.
NDRC Practice NoteLast reviewed 2026-04
Temporary loss of income (retrenchment, illness, contract gap) is treated differently from structural over-indebtedness. The assessment uses the consumer's projected income on return to work, not the current zero, to avoid producing a proposal that collapses the moment income resumes.
Filing on a zero-income basis when the income loss is short-term creates a proposal creditors will not accept and a court will not confirm. Where income resumption is uncertain beyond ninety days, the file is paused rather than pushed through.
Drawn from NDRC's active case work. For your situation, see our debt counselling overview.
Cite this clause
National Credit Regulator. (2015). Annexure B — Debt Review Assessment Guidelines, clause 2.4: Temporary Loss of Income. Guideline 001/2015 (Debt Review Task Team Agreements 2010), p. 30.