If you are in debt, and are looking for possible solutions for you, then look no further. Today, we will briefly look at possible debt solutions for you, to help you gain a basic understanding of what you can do to get out of debt in South Africa.

Debt Review

Debt Review is perhaps the best known of the debt solutions that may help you. It is a legal process, where your debt councillor negotiates with creditors for lower interest rates and amounts. Instead of paying each creditor individually, you pay one monthly consolidated amount. A distribution agency then distributes the money to the various creditors, and an application is made to court for a debt review order.

Once under debt review, you are protected against further legal action by creditors, as long as you stick to the agreed payments. If you miss one or pay late, the creditors have the right to take immediate legal action, and demand full payment of the debt.

Debt review is one of the suitable debt solutions for you, if you have a monthly income, are unable to pay your debts without the monthly instalments being reduced, and if the debts can be paid within five years. If the debt is substantial, it is better to apply for voluntary sequestration.


Another debt solution for you is administration. It is only suitable if you have lost your income, are unable to pay your debt, or your total debt is less than R50 000. A court order is granted, and your financial estate is administered. You pay lowered amounts to the creditors. However, you can end up paying for years, and the interest can be steep.

Debt Consolidation Loan

You can apply for a debt consolidation loan, if the loan amount is sufficient to pay off all the debt in one go. You will then only pay back the lender. However, steep interest rates and fixed terms often make this difficult, and you can end up making more debt.

Voluntary Sequestration

Voluntary sequestration is one of the debt solutions for you, if you have adequate assets, and the sale thereof by the court appointed trustee can gather sufficient funds, to ensure the creditors receive the minimum benefit of 20 per cent. It is also a legal process.

Once the notice of your intention to sequestrate has been published, the creditors are prevented from taking further legal action against you. The creditor harassment stops, and you stop all payments to the creditors. Once the court order for sequestration is awarded, a trustee is appointed to oversee the sale of assets. The assets are sold, and the benefits are distributed to the creditors, according to the requirements of the Insolvency Act. You become debt-free in a relatively short period, and can then apply for rehabilitation if the appropriate period has elapsed.


Both options involve a court application, and in both instances, you do not have to appear in court. In both cases, you will be able to get debt relief, but with debt review, you pay off the debt through a consolidated monthly instalment.

With voluntary sequestration, you get rid of the largest part of your debt in one go. The remainder is payable over a period of 18 to 24 months, or in a lump sum with no added interest. With debt review, you do not lose any assets, but have the risk of not being able to pay the monthly instalments. In this instance, you will lose the assets. With voluntary sequestration, you do lose some of your assets, such as your house and vehicles. However, your pension fund is protected, as well as insurance policies that are not ceded to creditors.

You cannot enter any credit agreements while under debt review. You can enter into credit agreements while sequestrated, but only with the written permission from the trustee. In both instances, your credit record will be affected. With debt review, there will be a debt review flag on your credit record. Once you have paid off all the creditors, it is removed from the credit records.

With voluntary sequestration, your credit record shows you are sequestrated. Once rehabilitated, the status changes to rehabilitated, and remains so for five years, after which it is automatically removed.

The above provides a basic overview of some of the debt solutions for you. Call our attorneys to help you determine whether voluntary sequestration is one of the debt solutions that will work for your particular situation.

Disclaimer: This article is for informational purposes only, and does not constitute legal advice. Call our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.