What Counts as Debt and Qualifies for Debt Review?

With consumers under pressure as debt applications hit a record high, the need for debt review has never been more urgent. Many South Africans are turning to this debt relief programme to regain control of their finances. As professional debt counsellors, our Debtco Group team are here to answer the important questions you may have before applying, including what counts as debt and qualifies for debt review.

Let us start by considering what outstanding payments can be placed under debt review. It is helpful to know exactly what is classified as debt. Debt would describe any amount of money that you owe to another party, typically because of formal borrowing under agreed-upon terms. In South Africa, debt usually refers to amounts owed under a credit agreement regulated by the National Credit Act (NCA).

Are you facing debt problems? Start by taking a look at your credit report to see what reflects. Our FREE CREDIT CHECK is quick and easy to use!

Debts that Qualify for Debt Review

Personal Loans: These are regulated short-term or long-term loans you have taken out from a bank or lender for your personal use, such as paying for emergencies or consolidating other debts. They are repaid in fixed instalments with interest. If a student loan was granted under the National Credit Act, it can be included in debt review.

Credit Cards: When you apply for debt review, we will assess your credit card balances along with your other debts. If we determine that you are over-indebted, your credit card account will be frozen, and the outstanding balance will be included in the restructured repayment plan. Credit cards typically have higher interest rates than store cards. During debt review, we negotiate your monthly repayments and interest rates to help you keep up with what you owe.

Home Loans (Bonds/Mortgages): A home loan is used to finance the purchase of property, and so the repayment amount will be higher than other debts. This debt can be included in debt review to help reduce overall monthly obligations, as long as you act before legal steps are taken against you. Stop struggling financially – debt review helps by saving you money on your monthly debt repayments, while protecting you from asset repossession.

Car Loans/Vehicle Financing: Your home loan and car loan will likely be the most expensive debts in your name. When you are facing legal action for defaulting on your loan agreements, you risk asset repossession and stand to lose your car and/or home. Fortunately, car loans and home loans count as debt and qualify for debt review.

Business debts (credit taken for business purposes) and informal loans from friends, family, or unregistered lenders cannot be included in Debt Review. Also, debts with existing court enforcement or legal judgments may be excluded. Are you wondering where to get help with debt? If you’re unsure what counts as debt and qualifies for debt removal, let our team at Debtco Group assist you.