MONEY CLINIC: We can't pay our debt

QUESTION: We are in debt. We underwent debt review and they promised that they would get the banks to lower their interest rates so we could have a chance to clear our debt. That didn’t happen.

Now my husband has had two brain operations and the side effect is that he has become vision impaired.

We have told the bank that we are not working and will resume our payment when we can, but they still keep threatening us. What can we do?

We also have a credit card debt for which we have received statements showing zero balances since 2009. We have asked for a latest statement but to no avail.

Third there is an account that we sent an agreement to pay a certain amount, but they didn’t reply. It has been over three years and now they are asking for payment.

Please help. We are no longer under debt review.

ANSWER: It appears to Money Clinic that debt review and the help of a debt counsellor could not satisfactorily solve the problem. Therefore this reader really needs professional legal advice from someone who could look at the specifics of their whole financial situation.

The legal advisor can look at the validity of debt claims (credit card account could have been closed; possible reckless lending by creditors or debt been prescribed), and try to prevent legal action being taken against them. If a debt lawyer is too expensive they should look at organisations like Legal Aid (call centre 0800 110 110; or SMS please call me to 0798357179; or visit to see if they qualify for free legal aid.

This question shows that debt is a serious issue with legal consequences. In terms of the law you have to pay back your debt at all costs.'

Today we have more help and protection for consumers and debtors. The National Credit Act for example makes it an offence to recklessly lend money to someone who cannot afford it and will land him/her in a lifelong debt trap.

There are always solutions; not always ideal ones, but nevertheless something that can better the situation.

Because of lack of details we can however in this case just broadly repeat the options when landing in trouble with debt, as described on the websites of the National Credit Regulator or various banks. 

These are selling assets to pay off debt; debt review, debt administration and voluntary sequestration. Just don’t do nothing at all, which will just worsen the situation.

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