Debt review fees explained

These are the maximum fees set by the National Credit Regulator for debt review. A counsellor may charge up to these amounts, not more.

These fees are added to your monthly debt review payment, not charged as separate bills. The once-off restructuring fee in particular is usually spread across your early payments rather than demanded upfront in a lump sum.

The application fee (R50) simply covers lodging your application. The administration fee (up to R300) covers setting up your file and the initial admin of getting your matter going.

The restructuring fee (up to R8,000, or R9,000 for couples married in community of property) is the big once-off charge. It pays for the core work: assessing your finances, building a restructured plan, negotiating it with all your creditors, and getting it to court. The monthly after-care fee (5% of your instalment, capped at R450) pays for the ongoing management of your plan every month for as long as it runs. The payment distribution fee (R15 per payment over R500) goes to the payment distribution agency that receives your single monthly payment and splits it correctly among your creditors.

A key point that confuses people: you do not pay these fees on the side. Your debt counsellor works out one affordable monthly amount, and the fees come out of that single payment along with the money that goes to your creditors. So your one debit each month covers your restructured debt instalments, the after-care fee and the distribution fee.

This is why the early months of debt review can feel like the balances are barely moving - a larger share of those first payments often goes toward the once-off restructuring fee before the bulk starts flowing to creditors. It is normal, but you should ask your counsellor for a breakdown showing how each payment is split, so you can see exactly where your money goes.

Because the fees are capped, the main thing to watch for is being charged above the ceilings or being charged for things that should be included. Ask for your full fee schedule in writing before you sign, and compare each item against the table above. Be wary of any counsellor demanding the entire restructuring fee as a large upfront lump sum, or charging extra fees for issuing your clearance certificate, which is part of their duty.

Also watch the after-care cap: 5% of your instalment but never more than R450 a month. If your fees look higher than the regulated maximums, raise it with the counsellor in writing first. If it is not resolved, you can complain to the National Credit Regulator at dccomplaints@ncr.org.za, which oversees debt counsellor conduct and fees.

For someone genuinely over-indebted, the fees usually buy more than they cost. Debt review can reduce your interest rates and instalments substantially and protect you from legal action, and those savings often outweigh the regulated fees over the life of the plan. You are paying for a structured, legally protected route out of debt that you would struggle to negotiate alone with many creditors.

For someone with a temporary or single-account problem, though, the once-off restructuring fee may not be justified when a simple repayment arrangement or a settlement would do. That is the honest test: if your budget genuinely does not balance and you have multiple creditors, the fees are a fair price for the relief; if it is a smaller, short-term issue, handle it with the letter templates first and keep the fees in your pocket.