Debt mediation vs debt review vs debt counselling
These terms are often used as if they mean the same thing. They do not.
Debt counselling is the service provided by an NCR-registered debt counsellor. Debt review is the statutory process under the National Credit Act. They are closely linked, but not exactly interchangeable.
For this comparison, debt mediation means a private, voluntary arrangement between a consumer and creditors. It is distinct from statutory debt review. The legal classification of any particular service depends on how it operates and what it does.
Here is how the two routes compare.
| Debt mediation | Debt review / counselling | |
|---|---|---|
| NCR status | Not the statutory debt-review process; the specific model still needs to be structured carefully | Conducted under the National Credit Act through an NCR-registered debt counsellor |
| Court or tribunal order | No statutory debt-review order | A court or National Consumer Tribunal order may confirm the restructuring |
| Protection from creditors | No NCA debt-review protection | NCA protections apply to credit agreements covered by the process, subject to the Act and the arrangement being followed |
| Who runs it | A mediator or mediation practice | An NCR-registered debt counsellor |
| Access to new credit | Not automatically restricted by debt-review rules | Generally restricted while the consumer is under debt review |
| Setup | May be faster and involve less paperwork, depending on the provider | Formal steps, assessment, proposals, and possible court or tribunal proceedings |
Debt review and debt counselling
Start here, because this is the process recognised by the National Credit Act.
Debt counselling is provided by a debt counsellor registered with the National Credit Regulator. The counsellor assesses the consumer's financial position and determines whether they are over-indebted. If restructuring is appropriate, the counsellor prepares a proposal for the consumer's credit providers. A court or the National Consumer Tribunal may then confirm the restructuring.
Once the process is in place, the protections provided by the NCA apply to the credit agreements covered by it, subject to the Act and the consumer keeping up with the agreed payments.
Debt review is a formal commitment. Consumers are generally restricted from taking on new credit while they are under debt review, and their credit profile is recorded as being under debt review while the process runs.
You can check whether a debt counsellor is registered on the National Credit Regulator's own register before signing up.
Debt mediation
Debt mediation is a private, voluntary arrangement between a consumer and creditors. A mediator may negotiate lower instalments or different payment terms. Some mediation services also collect one monthly payment and distribute it between creditors.
There is no statutory debt-review court order or NCA debt-review protection as part of a private mediation arrangement. A creditor that does not agree to the proposal may still take action available to it.
Mediation can work when creditors are willing to cooperate and the consumer mainly needs help organising a payment plan and managing the monthly distribution. Before signing up, ask who holds the money, how payments are distributed, what records you receive, and what happens if a creditor declines the proposal.
Which one fits your situation?
If creditors are already threatening legal action, or you need the certainty of a formal process with statutory protections, debt review is the route to discuss with an NCR-registered debt counsellor.
If your accounts are still manageable, your creditors are willing to cooperate, and you mainly need help organising payments without entering debt review, mediation may be worth considering.
Some people look at both options before deciding. Ask each provider exactly what process they offer, what protections apply, who holds your money, and what it will cost.
This page is general information, not legal or financial advice.
Common questions
Are debt review and debt counselling the same thing?
They refer to closely related parts of the same statutory framework. Debt counselling is the service provided by an NCR-registered debt counsellor. Debt review is the formal process under the National Credit Act.
Is debt mediation regulated by the NCR?
Private debt mediation is not the statutory debt-review process conducted through an NCR-registered debt counsellor. However, the legal position depends on how a particular service operates. A mediation service should not present itself as a substitute for statutory debt counselling or debt review.
Which is better?
Neither is automatically better.
Debt review offers a formal process and statutory protections, but it involves more steps and generally restricts access to new credit while the consumer is under review.
Debt mediation may be lighter and faster, but it does not provide NCA debt-review protection and depends on creditors cooperating.
The right option depends on the consumer's financial position, the creditors involved, and the protections they need.
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