Court Confirms What Happens If You Stop Paying your Debt Review

Many consumers believe that once they are under debt review, they are permanently protected from legal action. But a recent case, Nedbank v Mokgolo, shows just how quickly that protection can fall away when payments stop.

The Case in Brief

• The consumer bought a vehicle under an instalment sale agreement but fell behind on payments.
• While under debt review, Nedbank issued a section 86(10) notice, which terminates debt review when a client defaults.
• The consumer argued that Nedbank also needed to send a section 129(1) notice before taking legal action.

The Court’s Ruling
The court made it clear: once a section 86(10) notice is sent, there is no need for a section 129(1) notice. This means the debt review protection is gone, and the credit provider can proceed directly with repossession or enforcement.

What This Means for Consumers

• Debt review protection depends on ongoing compliance.
• Once a section 86(10) notice is issued, the credit provider can cancel your debt review and enforce the credit agreement.
• Even if you claim you didn’t receive the notice, most agreements include “deeming clauses” which treat notices as delivered once posted.

Key Takeaway for Debt Counsellors
This judgment highlights the importance of:

• Educating clients that debt review only protects them if they keep up with payments.
• Monitoring defaults closely and intervening early to avoid termination.
• Encouraging compromise or restructuring before credit providers resort to section 86(10).

Key take away for Consumers:

Debt review protection only works if you keep up with your payments. The moment you stop paying, that protection falls away.

Be cautious of credit providers who contact you directly, warning that you’ve missed a payment and threatening termination. This is often an unethical tactic designed to unsettle you, hoping you’ll stop paying under debt review. If you do, they can legally terminate your debt review and take legal action.

Remember the golden rule:

• Your first payment goes to your debt counsellor for restructuring and admin costs.
• Your second payment covers legal fees.
• Credit providers only start receiving payments from month three.

So, if a credit provider pressures you early on, stay calm, keep paying through your debt review plan, and remember that the process is structured to protect you — as long as you stay compliant.

In short: Debt review is a shield – but it only works if the consumer holds it up by paying. – For full case law, refer to the following link: https://www.saflii.org/cgi-bin/disp.pl?file=za/cases/ZAGPJHC/2025/850.html&query=debt%20near%20review

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– Vanessa Johst (Operations Manager DCASA) 16 September 2025