Can the Bank Take Your House if You Are Under Debt Review?

Many South Africans turn to debt review as a lifeline when they can no longer keep up with their monthly credit repayments. The process is meant to protect consumers from losing their homes and other assets — but does it always succeed? And can a bank still take your house while you’re under debt review?

Understanding Debt Review

Debt review is a legal process introduced under the National Credit Act (NCA) to assist over-indebted consumers. Once a person applies through a registered debt counsellor, their debt obligations are formally assessed and restructured into a more affordable repayment plan.

One of the key protections of the process is that creditors may not take legal action against a consumer who is officially under debt review — provided the application was made before legal proceedings (such as a summons) were initiated.

When the Bank Can’t Take Your Home

If you’ve applied for debt review before the credit provider issued a summons, your home loan account will generally fall under the protection of the NCA. This means the bank cannot simply repossess or sell your property while your debt review is in effect, as long as you:

• Continue to make payments in line with the debt-counsellor’s repayment plan, and

• Maintain communication with your counsellor and creditors.

In such cases, the debt review acts as a temporary shield against legal enforcement while you work to repay what you owe.

When Protection Falls Away

However, the protection is not absolute. According to recent commentary by the National Credit Regulator (NCR) and a recent High Court case, your right to debt review falls away once a summons has been issued.

If your credit provider has already started legal proceedings or obtained a judgment, the matter moves out of the debt-review sphere. The bank may then proceed with foreclosure and a sale in execution of the property — even if you later attempt to apply for debt review.

In short: timing matters. You must apply for debt review before legal action begins.

The Importance of Compliance

Even when you are under debt review, you must still honour the new repayment plan. If you default on payments or fail to follow the agreed process, the creditor may apply to have the debt review terminated — reopening the door for foreclosure. Debt review is not a payment holiday; it’s a structured form of rehabilitation. Falling behind again can undo the very protection you sought.

What Homeowners Should Do

Act early. If you’re struggling with bond repayments, contact a registered debt counsellor before receiving a summons.

Stay informed. Ask whether your credit provider is classified as a “credit provider” under the NCA — some guarantee or indemnity arrangements fall outside the Act’s protection.

Seek legal guidance. A qualified attorney like Rudolf Buys & Associates Attorneys can help you determine whether the bank’s actions are lawful and what remedies are available.

Keep records. Save all correspondence from the bank, your counsellor, and the court. This information becomes crucial if disputes arise.

Final Thoughts

Debt review can be an effective tool to avoid losing your home — but it is not automatic protection. The process must be initiated before a summons is issued, and it requires full compliance with the repayment plan.

If you are in arrears or facing foreclosure, the best step is to seek legal advice immediately. Acting quickly can mean the difference between keeping and losing your home.

Need Help?

At Rudolf Buys & Associates Attorneys, we assist clients with keeping their homes and negotiating with banks. Contact us today to schedule a consultation and explore your legal options.