Does Debt Counselling Protect Your Assets?
For many South Africans, the fear of losing a home or a car is among the most stressful aspects of falling behind on debt. When financial pressure builds, creditors begin calling, legal letters arrive, and repossession becomes a real threat long before people fully understand their rights. This is precisely why so many ask: “Does debt counselling actually protect my assets?”
Legally, under the National Credit Act (NCA), debt counselling offers legal protection while you repay your debts through a manageable, structured plan. Here’s how it works.
Legal Protection Under the NCA
Debt counselling is a legal process established by the National Credit Act (Act No. 34 of 2005). Once you apply and your debt counsellor submits your Form 17.1 to creditors and credit bureaus, you receive immediate legal protection. If you make it to this point, your creditors won’t be allowed to take new legal action; this means they cannot attempt repossession (unless your account has already been handed over to an attorney or a court judgment exists). This gives you breathing room to restructure your finances without harassment or threats of asset loss, which is often the crucial difference between recovery and losing everything.
In addition to stopping legal action, the NCA also requires creditors to communicate directly with your debt counsellor, not with you. This prevents threatening calls, letters, and constant pressure from collection agents. The protection gives you the space to focus on rebuilding stability through a realistic repayment plan, while ensuring your home, car, and other essential assets remain secure during the restructuring phase. As long as you comply with the debt counselling process, this legal shield remains in full effect.
Protecting Your Home and Vehicle
Debt counselling safeguards your most important assets: your home and your vehicle. Once these accounts are included in your debt counselling proposal, your debt counsellor will negotiate reduced, affordable payments. As long as you maintain these payments according to the new plan, creditors cannot repossess your property. You keep full use of your home and vehicle throughout the process.
This protection provides stability and ensures you do not lose essential assets while you work to restore your financial position.
What Debt Counselling Cannot Protect
One thing to note is that debt counselling cannot reverse legal actions that started before your application. Debt counselling protection only begins once your Form 17.1 has been issued to creditors and the credit bureaus. If legal proceedings were already underway before this point, those specific accounts may not be protected.
For example:
- Suppose your creditor has already obtained a court judgment, garnishee order, or emoluments attachment order. In that case, that debt is already in legal enforcement and may fall outside the protection of debt review.
- Suppose a repossession order has been granted for your vehicle or a summons has already been issued for your home loan. In that case, the creditor may continue with enforcement despite your debt counselling application.
- If your account has already been handed over to attorneys for litigation, the process may continue unless both parties agree to suspend the action.
Additionally, specific categories of debt do not qualify for debt review at all, such as:
- Traffic fines
- Maintenance orders
- Certain student loans
- Judgment debts have already been handed over.
- Service accounts are not linked to a credit agreement.
These debts cannot be included in or negotiated under debt counselling, so they must be managed separately.
How to Keep Your Assets Protected
To maintain your asset protection throughout the debt counselling process, it’s essential to stay consistent and proactive. The strongest safeguard you have is full compliance with the debt review plan created for you.
Here’s what that looks like:
- Make all monthly payments on time through your accredited Payment Distribution Agency (PDA). Missing payments can revoke your legal protection and give creditors the right to take action.
- Communicate with your debt counsellor immediately if your income changes, you lose your job, or you face financial difficulty. Early intervention allows them to adjust their plan or negotiate temporary relief.
- Remain compliant until you receive your Form 19 Clearance Certificate, which confirms that all debts included in the debt review have been fully settled.
Following these steps keeps your home, car, and other financed assets safe while you work toward long-term financial freedom. Debt counselling protects what matters most: your assets, your stability, and your peace of mind. By applying early, sticking to your repayment plan, and staying in close contact with your counsellor, you can avoid repossession and rebuild your financial foundation.
If you’re worried about losing your home or car due to unpaid debt, debt counselling may be your safest and most effective path forward.