NCR & the law
Debt restructuring explained
By Lerato Molefe · 5 min read · Updated 24 June 2026
Debt restructuring means reorganising your debts into more affordable terms, usually lower instalments, a longer repayment period and reduced interest, and in South Africa the formal, court-backed form of debt restructuring is debt review under the National Credit Act, where a registered counsellor restructures your debt and a court makes the new plan binding.
The term covers everything from a simple payment arrangement to full debt review.
This page explains what debt restructuring is, the formal and informal routes, and how it fits with debt review.
What debt restructuring means
Debt restructuring is the process of changing the terms of your debt so you can afford to repay it. Typical changes include:
- Lower monthly instalments.
- A longer repayment term.
- Reduced interest rates.
- Consolidating several payments into one.
The goal is the same in every case: turn unaffordable debt into a plan you can actually sustain.
Formal restructuring: debt review
In South Africa, the main formal route is debt review. A registered debt counsellor restructures your debts and takes the plan to a magistrate's court for a section 87 order. This formal restructuring gives you:
- One affordable monthly payment.
- Negotiated lower interest and instalments.
- Legal protection from creditors under section 88.
- A clearance certificate when you finish.
This is the strongest form of restructuring because it is court-backed and regulated by the NCR.
Informal restructuring with creditors
You can also restructure debt informally by negotiating directly with each creditor - asking for a lower instalment or a payment holiday. This can work for a temporary problem, but:
- There is no legal protection - a creditor can change their mind or still sue.
- You must negotiate with each creditor separately.
- Nothing stops other creditors from acting.
Informal restructuring suits a short-term cash-flow dip, not genuine over-indebtedness.
Restructuring vs consolidation vs review
| Approach | What it is | Protection |
|---|---|---|
| Informal restructuring | Direct deals with creditors | None |
| Debt consolidation | One new loan to replace debts | None |
| Debt review | Court-backed restructuring | Legal (section 88) |
Debt review is restructuring with the full backing of the law. If you are over-indebted, it is usually the safest form of debt restructuring available.
Frequently asked questions
What is debt restructuring?
Debt restructuring means reorganising your debts into more affordable terms - lower instalments, a longer term and reduced interest. In South Africa, debt review is the formal, court-backed form of debt restructuring.
Is debt restructuring the same as debt review?
Debt review is the formal, court-backed type of debt restructuring under the National Credit Act. Restructuring is the broader idea; debt review is the regulated version with legal protection.
Can I restructure my debt without debt review?
Yes, informally, by negotiating new terms directly with each creditor. But there is no legal protection, you deal with each creditor separately, and it suits a temporary problem rather than real over-indebtedness.
What is the difference between debt restructuring and consolidation?
Restructuring changes the terms of your existing debts; consolidation takes one new loan to replace them. Debt review is court-backed restructuring with legal protection, which consolidation does not provide.
Does debt restructuring lower my interest?
It can. Under debt review, your counsellor negotiates reduced interest and instalments with creditors. Informal restructuring depends on what each creditor agrees to.
Is debt restructuring a good idea?
If you are struggling to afford your debts, restructuring through debt review gives affordability plus legal protection. For a brief cash-flow dip, informal restructuring with creditors may be enough.
