Debt Mediation vs Debt Review in South Africa: 5 Key Differences

If you are behind on credit cards, store accounts or a personal loan, two phrases come up again and again in South Africa: debt review and debt mediation. They sound similar, but the legal status, the impact on your credit profile and the way you exit each one are very different. Choosing the wrong route costs time and, often, thousands of rands you didn’t need to spend.

This guide breaks down the five differences that matter most before you sign anything.

What is debt review?

Debt review (also called debt counselling) is a formal process under section 86 of the National Credit Act. A registered debt counsellor assesses your income, expenses and debts, declares you over-indebted, and approaches your creditors with a restructured repayment plan. That plan is then made an order of the court or the National Consumer Tribunal.

While you are under debt review, you cannot take out any new credit, your accounts are flagged at the credit bureaus, and a Payment Distribution Agency (PDA) collects one consolidated monthly amount from you and pays your creditors.

What is debt mediation?

Debt mediation is a voluntary, out-of-court arrangement. A mediator negotiates with your creditors to reduce instalments, lower interest rates or extend the term – without the formal section 86 process. There is no court order and your accounts are not flagged with a debt review code.

If you’d like the full picture before deciding, our debt mediation service page explains how the process works in practice.

The 5 key differences

1. Legal status

Debt review is a statutory process; once a magistrate or the Tribunal grants the order, your creditors are legally bound by it. Debt mediation depends on each creditor agreeing in writing – and a creditor that doesn’t agree can still sue you.

2. Credit bureau impact

Debt review places a flag on your credit profile that stays until a clearance certificate is issued. Mediation generally does not, although individual missed payments before mediation started will still reflect. If your priority is keeping a clean bureau record, this is the single biggest difference. Read more about credit clearance and bureau flags here.

3. Access to credit

Under debt review you are prohibited from taking out new credit until you exit. Under mediation, your existing credit profile is what limits you – there is no automatic ban.

4. Time to complete

Debt review typically takes 36 to 60 months from start to clearance, depending on the size of the debt. A mediation arrangement can sometimes wrap up in 12 to 24 months because instalments aren’t capped by an affordability calculation in the same way. We covered the debt review timeline in detail in this earlier post.

5. Exit and recovery

To exit debt review you need either a clearance certificate (debts settled) or a rescission of your debt review order. Exiting mediation is usually as simple as completing the negotiated payments. After that, both routes lead to the same place: a clean profile and the right to apply for credit again.

Which one is right for you?

Use this rough rule of thumb. If you genuinely cannot afford your minimum payments and creditors are threatening legal action, debt review’s court protection is worth the bureau flag. If you’re behind but think you can catch up with reduced instalments, voluntary debt mediation usually leaves your record cleaner and is faster.

Edge cases (an income that fluctuates, secured debts like a bond, or a recent default judgment) are where most people pick wrong. That’s exactly the moment to talk to someone who handles both processes daily.

Common questions

Will debt mediation appear on my ITC?

The mediation arrangement itself does not. Pre-existing arrears, default judgments and any defaults registered before the mediation started will still be on your bureau report until they prescribe or are cleared.

Can I switch from debt review to mediation?

Only by rescinding the debt review order through the Tribunal or court. We handle the rescission application end-to-end where it is appropriate.

Is debt mediation cheaper?

Usually yes – there are no court fees, no PDA charges and no ongoing debt counsellor fees, only a one-off mediation fee. The total cost over the lifetime of the arrangement is materially lower for most people.

Talk to us before you choose

Picking between debt review and mediation is the kind of decision that shapes the next two to five years of your financial life. We give you a clear, no-obligation comparison based on your actual numbers – not a generic recommendation.

Request a free assessment via our contact form and we’ll come back to you with the route that puts the most money back in your pocket.

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