Is a Debt Relief Payment Plan for Me?




Is Debt Relief Plan Assistance/Court Mediation for me?

Answer these questions to determine if Debt Relief  Plan or Court Mediation is for you:
Are you in arrears and been served with a section 129 notice, letter of demand or summons AND you have not gone under debt counselling?
Has your account been handed over to outside debt collection agents, including attorneys?
Is your car or house in the process of being repossessed or auctioned with or without a court order?
Do you have judgements or adverse listing that you want to settle and remove from your credit report?


If you answered yes to any of the questions above you might need Debt Relief Payment Assistance which can assist you to:

  • Organise an affordable, realistic and structured monthly budget and debt repayment plan if you are in arrears to facilitate the stopping of any legal action that might lead to the creditor obtaining a judgment against you. Once a creditor has obtained judgment this can lead to a car or house being repossessed or your salary being “Garnished”.
  • By agreement, prevent the creditor from executing a court order (where your car or house is in the process of being repossessed OR auctioned) or proceeding with legal action by negotiating an acceptable repayment plan.
  • Negotiate discounted settlements or reasonable repayment plan where you have a judgment or adverse listing and facilitate the updating of your credit bureau report.


What is Debt Relief Plan Assistance?

With credit agreements that are regulated by the National Credit Act (NCA), the legal process usually commences with:

  • A section 129 notice that credit providers are obliged to issue to you once you are in default for at least 20 business days.
  • Once you have received a section 129 letter you have the option to refer that specific credit agreement to a debt counsellor, an Alternative Dispute Resolution Agent, Consumer Court or Ombud with jurisdiction. The intention is that the credit provider and you resolve any dispute related to the agreement or agree on a plan to bring the arrears up to date.
  • If 10 business days elapse without you responding to the section 129 notice or if negotiations are not successful, the credit provider is at liberty to proceed to issue a Summons; and
  • After summonses are served the court will issue a judgment against you if you defend the matter or a default judgment if you are not present in court;
  • Once a judgment is issued the credit provider also obtains the right to repossess and sell any asset “ or Garnishee” your salary


Debt Relief Assistance can be applied at any stage of the legal process as explained above, even where the credit provider has a court order but has not yet executed it. Instead of approaching a lawyer, you can approach the NDMA debt counsellor to assist you with making payment arrangements.


Protection from Legal Action for section 129 arrangements or DRP Plans


In terms of section 130(3)(c) of the National Credit Act a credit provider cannot proceed with legal action under the following circumstances:

When the matter is being considered by a debt counsellor, alternative dispute resolution agent, consumer court or Ombud with Jurisdiction or when the consumer has;

  1. Surrendered property to the credit provider and that property has not been sold yet;
  2. The credit provider has agreed to a debt relief proposal made in terms of section 129(1) and the consumer is acting in good faith to fulfil that agreement;
  3. The consumer has fully complied with the agreed debt relief plan; and
  4. The consumer has brought the account up to date.


Benefits of a Debt Relief Plan (DRP)

It is important to note that the success and the outcome of negotiation of payment arrangements are not

guaranteed but we have achieved a success rate of above 80% in more than 5000 cases we have negotiated since 2010. The status of the account in terms of the arrears, the stage of collection or legal process, previous arrangements made and your historical payment behaviour will determine the outcome of the negotiations. It is therefore important to act early and avoid making any arrangements that you will not be able to honour or without first seeking expert advice. The benefits of making payment arrangements are:

  • It is a process that does not involve the courts or lawyers thus saving you money;
  • The stress of having to deal with your credit providers or their legal representatives on your own is reduced as the Debt Counsellor assists you through the process;
  • You are protected from legal action as long as the credit provider has agreed to any new arrangement and you continue to pay according to the new terms or adhere to any agreement reached;
  • You can exit the arrangement at any time when your circumstances change, without having to seek a court order;
  • It will be noted on your credit bureau record that you have restructured your debts;
  • If you pay off the debt all adverse listings regarding each of the accounts will be removed according to the guidelines of the National Credit Act but your repayment history will continue to show the payment patterns;
  • You will receive support and guidance from your debt counsellor on how to manage your budget and sustain the new arrangement.


The Debt Relief Assistance Process:

  • The negotiations are sometimes conducted telephonically.
  • You are required to make yourself available telephonically to participate in the negotiation process.
  • The Debt Counsellor will facilitate the discussion between you and your credit providers and ensure that the process is fair and yield win win outcomes.
  • Credit providers might want to speak to you directly to verify your identity and ensure that you understand the implications of the new arrangement or agreement.


Credit Provider Rights:

  • The success and outcome of the negotiations is not guaranteed and depends on the history and the status of the account, the law and other related factors;
  • Creditors can charge interest and fees up to the prescribed legal limit.
  • The new arrangement will be cancelled if you do not honour the agreement and credit providers can continue with legal action.
  • There are some instances where the credit providers will not make further concessions if concessions were already made or where the previous arrangements were not honoured.
  • Each credit provider will apply its own restructuring or payment arrangement policy and the outcome of the negotiation will depend on the amount of arrears, the action already taken and previous repayment behaviour.
  • The collections departments might still call you but as long as you have the new arrangement in writing you should be fine.


What is a Debt Relief Plan?

Where you are in arrears, have received a section 129 notice, summons or been handed over and you have opted not to go under debt counselling, the NDMA will arrange a debt relief plan for you. It is a negotiated repayment plan for each credit agreement that is meant to allow you to catch up or manage arrears:

  • It is a plan that allows you to meet your essential living expenses and manage your arrears according to your affordability.
  • It is a plan for when you cannot afford to make the full contractual monthly payments on your debts due to a change in circumstances like divorce, retrenchment, maternity leave, illness and other unexpected expenses or events.
  • It will not write off your debts but it will allow you to make negotiated reduced monthly payments.
  • The plan is not court ordered and can be cancelled by you when your situation changes but as long as you keep to your restructured payments credit providers will normally not take legal action.
  • You may still be contacted by your creditors if you use a third party like us to arrange a payment plan on your behalf. Do not agree to any arrangement without first consulting with us as it is important that any arrangement you make is within your prepared budget.
  • You will continue paying your creditors directly on the agreed method which could either be a debit order or cash.


How does a Debt Relief Plan work?

  • A revised budget will be prepared for you and discussed to ensure that it is reasonable and sustainable.
  • The debt counsellor will, on your instruction and consent negotiate with credit providers or debt collectors on your behalf on those accounts that are in arrears and are in the process of being handed over to the legal process.
  • Once there is acceptance from your credit providers the new payment plan will be implemented and you will receive confirmation of the new arrangement in writing.

The advantages of a Debt Relief Plan:

  • You will avoid legal action, a judgment against your name as well as the loss of your assets or a “Garnishee” against your salary.
  • No legal fees will be charged by the debt counsellor as this is not a process that requires going to court.
  • The debt counsellor will support you during the negotiation process and once a plan is in place monitor your monthly payments to the credit providers.


Things to consider:

  • It may be necessary for you to make lifestyle changes that involve reducing non-essential expenses and maintaining a strict budget.
  • Making regular payments on the agreed dates will ensure that no further action is taken against you. You are still responsible for your own debts; the debt counsellor is assisting and not taking them over.
  • Proof of payment needs to be sent to your debt counsellor every month after making a payment.
  • We strongly recommend that no new credit agreements should be entered into or additional debts incurred whilst on the plan as this will affect your affordability negatively.
  • If your circumstances improve during the course of your plan you need to let the debt counsellot know and we will adjust your plan and inform your creditor(s) of the increased payments to follow. This will allow you to get your accounts in good order and improve your payment profile without delay.
  • Do not use available credit on store or credit cards as this will increase your monthly repayment which the new budget will not include, placing you in a worse off situation.

Court Annexed Mediation


The CEO of the NDMA, Magauta Mphahlele has been appointed and accredited as a Court Annexed Mediator by the Minister of Justice on the advice of the Mediation Panel. She is number 143 on the published Mediator List. Magauta specialises in credit, consumer protection and rental disputes. The NDMA will therefore be able to assist you if you are threatened or are in the process of being taken to court and you approach the Court for Mediation. The NDMA specialises in car repossessions, property auctions, debt collection, rental disputes and consumer contracts.


Should you have received summons to appear in any of the pilot courts you approach the mediation clerk in the Civil Section at the Magistrate’s Court which has jurisdiction in respect of the dispute. The clerk will arrange for the parties to attend a meeting to assess whether their dispute can be submitted to a mediator. Mediation will be rendered at dedicated rooms identified as Therisano Centres.


There are no court fees, but the mediator is entitled to charge a fee according to a fixed tariff. You can request a list of courts where Court Mediation is offered as well as the tariffs at


Below are Frequently Asked Question as outlined by the Department of Justice.


What is Court Annexed Mediation?

It is a process by which a mediator assists the parties in a legal dispute by:


  1. Facilitating discussions between the parties.
  2. Assisting them in identifying issues.
  3. Exploring areas of compromise.
  4. Generating options in an attempt to resolve the dispute.
  5. Mediation is an alternative to having the dispute resolved in court.


Where do I go for mediation services?



What are the benefits of mediation?

  1. It offers speedy resolution of disputes.
  2. It is considerably cheaper than litigation.
  3. It provides a win-win situation for both parties in a dispute.
  4. The process is flexible and avoids technicalities.
  5. It is a voluntary process.
  6. It promotes reconciliation.
  7. Parties can use their own languages.


Which matters can be referred for mediation?

Most disputes are appropriate for mediation, as long as the court has jurisdiction in respect of the matter. Examples are contractual claims; motor vehicle collision and other damages claims; neighbourhood disputes and family disputes.


Will there be court fees?

There are no court fees, but the mediator is entitled to charge a fee according to a fixed tariff. The parties contribute equally to this fee, which must be paid before the mediation commences. The mediator will be a person that the parties choose, with the help of the mediation clerk, from a panel of accredited mediators appointed by the Minister of Justice and Correctional Services. All mediators have undergone mediation training. Some specialise in particular types of matters, such as family disputes. The clerk will advise you as to which of the mediators is appropriate for your dispute, depending on factors such as area of practice and experience.


Will the mediator tell the parties who is right and who is wrong?

No, a mediator does not judge the parties or tell them what the solution to their dispute is. It is for them to find a solution that meets their needs and interests. The task of the mediator is to assist them to do this. The mediator will help them to identify the real issues and explore different options for resolving those issues. The mediator assists them, using skills acquired through training and experience, to diffuse conflict and explore options for settlement.


If the parties reach agreement the mediator will assist them to draft a settlement agreement. The settlement agreement is enforceable in law as a contract. It can be given additional strength by having it made an order of court, if the parties agree to this. If the parties are unable to settle their dispute through mediation then they may still resort to litigation and adjudication.


Do I need to be represented by a lawyer?

No, parties have the right to be represented if they want to be, but this is not obligatory. Parties who are represented will be responsible for the fees of their legal practitioners. It is the task of the mediator to ensure a fair and structured process with a level playing field, irrespective of whether parties are represented by lawyers or not. Parties can also request that a friend or family member be allowed to be present during the mediation to lend support.


Can mediation be used where litigation has already commenced?

Yes, matters can be referred for mediation at any stage during the court process before a judgement has been given.


How long does the process of mediation take place?

Simple disputes can often be resolved within a few days. More complex disputes may take a few weeks.


What happens in an event where mediation has resulted in a positive outcome but one of the parties later fails to comply with their agreement?

If the agreement has been made an order of the court then it can be enforced through the Sheriff of the Court in the same way as any order of a civil court. If it has not been made an order of the court, then it is enforceable in the law in the same way as any other legal binding agreement.


Which Courts offer Court Mediation?


The Justice Department has appointed Clerks of Courts to manage requests for Mediation in 12 courts in the Gauteng and the North West Provinces. Johannesburg, Protea, Randburg, Krugersdorp, Kagiso, Palm Ridge, Pretoria North and Soshanguve in Gauteng are ready to go. In the North West Mmabatho, Temba and Potchestroom are ready to go. For rules and fees please visit the Justice Department Website at



TEL: 012 315 4615/6

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