Your home is likely your most valuable asset and your family's security. If you're struggling with debt, the fear of losing your house can be overwhelming. The good news is that debt review is specifically designed to protect your home while you get your finances back on track.
The short answer: No. Under debt review, your home is legally protected from foreclosure and sale in execution. Your mortgage is included in the restructured repayment plan and the bank cannot take your house as long as you are making the agreed payments.
How Does Debt Review Protect My House?
When you enter debt review, your home loan is included in the restructured repayment plan along with all your other credit agreements. Your debt counsellor negotiates with the bank to:
- Reduce the interest rate on your mortgage, lowering the monthly instalment
- Extend the repayment period if needed to make payments more manageable
- Address any arrears by incorporating them into the restructured plan
- Halt any legal proceedings the bank may have initiated for foreclosure
Once the court grants the consent order, the restructured plan becomes legally binding. The bank must accept the reduced payments and cannot pursue foreclosure as long as you are complying with the order.
What Happens Without Debt Review?
If you are behind on your mortgage and do not enter debt review, the process typically unfolds like this:
You miss 1-3 mortgage payments. The bank contacts you requesting payment.
The bank issues a Section 129 notice — a legal letter giving you 10 business days to catch up or seek help from a debt counsellor.
If you do not respond, the bank applies to court for a judgment and order of sale in execution.
The court grants the order and a sheriff is appointed to sell your property at auction — often for far below market value.
If the auction proceeds do not cover the outstanding mortgage, you still owe the shortfall.
Debt review stops this process at any point before the court grants the sale in execution order. This is why acting early is critical.
The Constitutional Protection
South African courts have consistently ruled that a person's home deserves special protection. In the landmark Jaftha v Schoeman case, the Constitutional Court held that selling a person's home to satisfy a debt must be a last resort and subject to judicial oversight.
This means that even outside of debt review, courts will consider whether foreclosure is proportionate to the debt owed. Debt review adds an additional layer of protection by providing a structured alternative to foreclosure.
Protecting Your Home — Key Steps
Apply for debt review as soon as you start struggling. Don't wait until you receive a Section 129 notice.
If you're going to miss a payment, tell the bank before the due date. Communication shows good faith.
Only an NCR-registered debt counsellor can trigger the legal protections of the NCA.
Once under debt review, make every payment. Consistent payments maintain your legal protection.
What About Renting vs Owning?
If you are renting, debt review does not affect your lease agreement. Rent is treated as a living expense, not a credit agreement. Your debt counsellor will include rent as part of your essential expenses when calculating your affordable debt repayment amount.
Frequently Asked Questions
Will my home loan be included in debt review?
Yes. Your home loan (mortgage) is included in the debt review restructured repayment plan. The interest rate may be negotiated down and the repayment term adjusted to make the instalment more affordable.
What if I am already in arrears on my bond?
If you are behind on your mortgage payments, it is critical to apply for debt review as soon as possible — before the bank obtains a court order. Once you are under debt review, the arrears are addressed in the restructured plan and the bank cannot proceed with foreclosure.
Can the bank sell my house at auction if I am under debt review?
No. While you are under debt review and making the agreed payments, the bank cannot sell your house at auction. The court order protects your property. However, if you stop making payments under the debt review plan, this protection may be withdrawn.
What about my rates and taxes?
Municipal rates and taxes are not credit agreements under the NCA, so they are not included in debt review. However, your debt counsellor will include them as essential expenses in your budget to ensure you can afford them alongside your restructured debt payments.
