If the consumer’s revised living expenses
If the consumer’s revised living expenses are greater than his income and his assets are less than his liabilities, he is insolvent and could consider applying for sequestration, providing that the assets owned could assure advantage to concurrent creditors. Refer the consumer for professional advice to any attorney. The overall aim of the financial assessment is to assist the consumer to scale down and in so doing make sure that the amount available for debt repayments is maximized without being unrealistic. When such a budget is drawn up, Debt Counsellors should take into account that in most cases this is a long term budget. For this reason the budget should include an amount to be saved in a contingency account. This amount, which should not exceed 10 percent of the amount available, should ideally be saved in a separate account and can even be included in the amount paid over by the PDA. It is recommended that the 10 percent guideline be implemented for low income earners and that this percentage is reduced for high income earners. Debt Counsellors are encouraged to convince consumers to save the amount on a monthly basis for unforeseen or seasonal expenditure. For example annual school fees, vehicle maintenance, house maintenance or emergency situations.
NDRC Practice NoteLast reviewed 2026-04
Where revised living expenses still exceed income, debt rearrangement alone cannot solve the problem. The consumer is referred for sequestration advice or, where applicable, a debt intervention application under NCA s 86A.
Anchor: NCA s 86A (debt intervention) for qualifying low-income consumers and the Insolvency Act 24 of 1936 for sequestration referrals.
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 8.8: If the consumer’s revised living expenses. Guideline 001/2015 (Debt Review Task Team Agreements 2010), p. 45.