Fighting for survival

A Fin24 user is so indebted he feels that he cannot survive. He writes:

I’m in terrible debt, I can’t even survive.

If I get paid today, tomorrow I look for creditors to give me loans.

Friedl Kreuser of Summit Financial Partners responds:

Unfortunately, this is a sad reality for many South Africans.

When you are always relying on debt to make ends meet, the majority of your accounts are likely to be in arrears, and your debt is always growing due to the additional fees and interest charged when accounts are not paid.

This is called a debt spiral and it can be very dangerous. It is important that you seek professional intervention to put a stop to the cycle before it gets any worse.

There are a few options for South Africans overwhelmed with debt:


Consider sequestration if you have enough assets to sell to settle at least 40% of all your debt and pay about R20 000 in legal fees.

Debt counselling

This will cut off your access to debt, and help you create a budget for basic expenses and a payment plan to slowly get rid of your debt.

It's important to apply for debt counselling as soon as possible because once your credit providers start taking legal action for unpaid debts, those debts can no longer be included in your payment plan.

Also, if you end up with too much debt, the debt counsellor may no longer be in a position to help you.

Sell anything you can

The third option is to sell any assets that you can, pay off as much debt as you can, and then make arrangements directly with your credit providers to pay what you are able to.

Change your lifestyle

Most importantly, make sure you adjust your lifestyle to avoid all future debt and don't rely on family members to bail you out.

Keep in mind that your credit providers are not obliged to negotiate reduced instalments with you - they may not be willing to accept such arrangements, and proceed with legal action instead.

The important thing is to be responsible and take action to stop relying on debt as soon as possible, and not to wait for the problem to fix itself.

 - Fin24

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