COLUMN: Ignoring debt will not make it go away

2016-02-16 06:00

Debt has become a huge problem in South Africa, especially with the interest hike and unemployment – it is estimated that over 9m South Africans are over-indebted.

It has been reported that half of South Africa’s workforce is currently struggling with debt repayments, with a staggering 6000 vehicles and 2000 homes being repossessed monthly.

25 000 people are in danger of losing their homes. And don’t even mention looming retrenchment and unemployment.

This is an alarming state of affairs as we are entering 2016.

What is even more worrying is that we live in a culture in which consumers think that ignoring the issue will make it disappear. The reality is that it will only lead to undesired results, such as judgements and an unnecessary bureau listing.

The question is, if you find yourself in debt, what options do you have to rectify your situation and how can you move closer to obtaining financial freedom?

Your first step is recognising the signs that you are in debt: don’t be in denial and accept that you need help.

Examples of behaviours are regular short-term loans, pawn shop visits, using credit cards to buy basic necessities like food or even using your credit cards to repay your short-term loans.

Your immediate solution would be to approach your credit provider – be honest, transparent and discuss restructuring your debt repayment plan. Most importantly, live within your means and budget. Eat at home, not restaurants, reduce wasteful expenditure on luxury items and even downgrade your car, house or accommodation.

If this fails, you may need to seek professional help before legal action is taken against you.

The second option to consider is sequestration. This is when your liabilities exceed your assets. In other words, when your debt exceeds the money coming in.

When this is the case you are deemed insolvent. Once this happens, the court can sell your assets (your home, car and personal effects) to repay all your liabilities and debt.

The third option is administration. This is a process in which you hand all your financial affairs to an administrator, who will consolidate all your debt, for a fee, and repay your credit providers on your behalf. The credit providers receive debt repayment on your behalf.

There is nothing more powerful than educating yourself and selecting the right option for you. Debt places an enormous amount of stress on the individual and affects every area of your life.

V This column was contributed by Denzil Jacobs, an admitted advocate with expertise in commercial law. For guidance on legal issues email him on or read his column in People’s Post next month.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

How much food do you need to concentrate?

We have been taught that we need three meals a day in order to make it through the day and while most of us indulge in more than our fair share there is a large portion of South Africans who are living off barely enough to sustain them.


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.