Will I Lose My Assets When Going Under Debt Review? (The Complete Guide)

The short answer is no. You will not lose your house or car if you apply for debt review. In fact, debt review was designed by the National Credit Act (NCA) specifically to prevent you from losing your assets.

As long as you maintain your new, consolidated monthly payment, your assets are legally protected.

This guide will explain exactly how that protection works, the legal timelines you need to know, and the traps you must avoid.

When you enter debt review, you are placing yourself under the legal protection of the National Credit Act. This creates a "moratorium" (a legal freeze) on your credit providers.

Once your Debt Counsellor officially notifies your creditors that you have applied for debt review (Form 17.1), they are legally blocked from taking legal action against you. They cannot:

• Issue a summons for your debt.
• Obtain a court judgment against you.
• Send the Sheriff of the Court to attach your goods.
• Repossess your vehicle or home.

This protection remains in place as long as you stick to the restructuring plan agreed upon or ordered by the court.

The timing of your action is the single most important factor in protecting your assets.

You cannot place a specific debt under debt review if legal action on that account has already started. In practice, the process begins around the time of the Section 129 Letter of Demand.

What Exactly is This Notice?

A Section 129 letter is a formal notice from your credit provider. It tells you that you are in default and explains your rights. It is the final warning before they sue you in terms of South African law. You must take this letter seriously.

Here is what usually happens:

1. About 20 business days in arrears: You miss payments for around 20 business days.
2. The Section 129 letter: The credit provider sends a Section 129 notice, often by registered mail.
3. Your 10-day window: From delivery of that letter, you have 10 business days to act.

If you act within these 10 days:

• You can still contact a Debt Counsellor.
• The account can be added into debt review.
• This can stop the legal process on that account.

If you ignore the letter for 10 business days:

• The credit provider can issue a summons.
• Once a summons is served, that specific asset (for example, your car) usually cannot go into debt review.
• Debt review may still protect your other assets, but that car may be lost.

Do not wait for the letter. If you think you might miss a payment, act immediately.

Cars are the assets most people lose first. Often, it happens because consumers are pressured into giving them up.

When you fall behind on instalments, a debt collector may call or visit you. They may sound helpful and ask you to:

• “Just sign this document so we can help.”
• “Hand over the keys for safe keeping while you sort things out.”

Warning: In many cases, that document is a Voluntary Surrender form under Section 127 of the National Credit Act.

If you sign a voluntary surrender:

• You agree in writing to give the car back.
• Debt review cannot bring that car back once you have surrendered it.

Never sign any document from a debt collector without your Debt Counsellor checking it first.

Under debt review, your vehicle is usually safe from repossession, as long as:

1. You have not already received a summons on that account, and
2. You have not signed a voluntary surrender.

Losing a home is traumatic, and the courts treat it seriously.

Section 26 of the Constitution says no one may be evicted from their home without a court order that considers all relevant circumstances. However, if you ignore your bond repayments, the bank can still ask the court to sell your home at auction.

How SDC Helps Protect Your Home

Through debt review, SDC usually:

• Places your home loan under debt review.
• Extends the term of the bond.
• Reduces your required monthly instalment to an affordable amount.

The bank receives a lower amount each month, but it is regular and backed by a court or tribunal order. With that order in place, the bank must accept the restructured plan and cannot simply foreclose, as long as you pay as agreed.

Debt review at Sandton Debt Counselling includes an investigation into reckless lending.

We check your credit agreements to see whether the credit provider did a proper affordability assessment. If they gave you credit you clearly could not afford, the loan may be reckless.

If a court declares a loan reckless:

• The debt can be written off completely, or
• Payment of that debt can be suspended for a period or even indefinitely.

This is a powerful legal remedy that you access through the debt review process.