Our Debt Counsellors help over-indebted consumers by developing an affordable repayment plan. In this article, we will be explaining in detail everything you need to know about debt counsellors and more.

Debt Counsellors and Debt Counselling in South Africa.

When the National Credit Act 34 of 2005 was promulgated in 2007, it gave birth to the profession of debt counselling. The purpose of debt counselling is to offer an alternative remedy to over-indebtedness than traditional methods such as administration and sequestration could offer.

The regulations defined a debt counsellor as “a natural person who is registered in terms of section 44 of the Act offering a service of debt counselling.

Application for Registration as a Debt Counsellors.

In terms of the National Credit Act, a person who wants to apply for registration as a debt counsellor:

  • Must be a natural person.

A natural person may not be registered as a debt counsellor if that person:

  1. is under the age of 18 years;
  2. As a result of a court order, is listed on the register of excluded persons in terms of section 14 of the National Gambling Act, 2004
  3. is subject to an order of a competent court holding that person to be mentally unfit or disordered.
  4. Has been removed from an office of trust on account of misconduct relating to fraud or the misappropriation of money, whether in the republic or elsewhere;
  5. Has ever been a director or a member of a governing body of an entity at the time that such entity has – been involuntarily de-registered in terms of public regulation, brought the consumer credit industry to disrepute or acted with disregard for consumer rights generally; or
  6. Have been convicted during the previous 10 years in the Republic or elsewhere, of Theft, fraud, forgery or uttering a forged document, perjury or an offence under the Prevention and Combating of Corrupt Activities Act, or comparable legislation of another jurisdiction. A crime involving violence against another person or an offence in terms of this Act, a repealed law or comparable provincial legislation, and has been sentenced to imprisonment without the option of a fine unless the person has received a grant of amnesty or free pardon for the offence.
  7. in addition to the disqualifications set out in subsection 3, a natural person may not be registered as a debt counsellor if that person is – subject to an administration order as contemplated in section 74 of the Magistrates Court Act or debt re-arrangement as contemplated in section 86 or 87 of the National Credit Act or engaged in, employed by or acting as an agent for a person that is engaged in – Debt Collection, The operation of credit bureau, Credit provision or any other activity prescribed by the Minister on the grounds that there is an inherent conflict of interest between that activity and debt counselling.

The regulator will deregister a person who fails to comply with the above mentioned conditions at any time. In addition to the registration requirements, debt counsellors are expected to excersize good faith in all their transactions. Good faith is not limited to their actual functions as debt counsellors but it extends to all spheres of their lives. The purpose is to ensure that all material times the debt counsellor remains a person of trust and integrity.

  • May not offer or engage in debt counselling services unless registered.

The National Credit Act expressly provides that a person must not offer or engage in the services of a debt counsellor or hold themselves out to the public as being authorised to offer such services, unless that person is registered as such.

  • Must satisfy any prescribed education, experiance or competency requirements.

Education – A Grade 12 certificate or equivalent level 4 qualification issued by SAQA and a successful completion of a debt counselling course approved by the National Credit Regulator and provided by an institution approved by the National Credit Regulator.

Experience and Competence – Minimum of two years of working experience in any of the following fields. Consumer Protection, complaints resolution or consumer advisory service; Legal or paralegal service; Accounting or financial services; Education or training of individuals; Counselling of individuals or General business enviroment.

Demonstrated ability to – Manage his or her finances at the time of applying for registration; Good credit standing; Provide counselling or transfer skills.

  • Must be in a position to satisfy within a reasonable time such requirements as the National Credit Regulator may determine as a condition of the applicant’s registration.

Additional Registration Conditions for Debt Counsellors.

A Registered Debt Counsellor is required by law to;

  1. Show his/her certificate at the premises from which he/she conducts business;
  2. State his/her registration number and status in all communications as a consumer;
  3. Comply with all conditions of registration that are prescribed;
  4. Pay the annual renewal fees to the regulator within the prescribed time;
  5. Keep all prescribed records;
  6. Submit all prescribed reports to the Regulator in the prescribed manner and form.

What is the Debt Counselling Process?

In practise, a consumer will usually consult a Debt Counsellor when he or she realises that he or she cannot meet his or her monthly obligations.

In other instances, the consumer who has defaulted on payment on a particular credit agreement may receive a letter in terms of Section 129 of the Act from the credit provider that informs him/her of the default and refers him/her to, amongst others, a debt counsellor.

  1. Consumer consults a debt counsellor by completing this Free Online Application for Assessment for known as the Form16 or by sending us an email to info@ndrc.org.za
  2. A new monthly budget is made which covers all basic needs.
  3. Credit providers will supply information on all debts.
  4. A new repayment plan is made and sent to the creditors.
  5. Credit providers agree or make counter-proposals.
  6. The consumer starts to pay the new reduced monthly amount via a registered payment distribution agency like our iPDA
  7. Court documents are created including the plan and responses.
  8. The consumer signs the confirmatory affidavit for the court.
  9. The court considers the plan and makes a court order.
  10. The consumer pays every month.
  11. The PDA provides statements.
  12. Smaller debts are paid off making more funds available fo bigger debts.
  13. The time comes for the consumer to exit debt review.
  14. A clearance certificate is issued and all registered credit bureaus are informed.
  15. The consumer can begin to use credit again if they want.


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