Tips on How to Get Out of Debt in South Africa

With the fuel price at its highest ever, inflation skyrocketing, and salaries not being adjusted to make provision for the higher living costs, many South Africans find it almost impossible to service their debts. Indeed, they are caught up in a never-ending debt cycle.

If you are one of the millions of people struggling to pay your debts. and have so much debt that it might take the better part of two decades to get out of debt, you might want to follow some of the tips below that will show you how to get out of debt.

 

Stop Buying Food on Credit

Not all debt leaves you worse off than before. A home loan helps you to pay off an asset, as long as you can afford to do so. Buying consumables with a credit card or store account causes a never-ending debt cycle. You pay the account, and then because you do not have any cash left to buy food, you are forced to use the credit card again. However, the card or store account comes with high interest rates, causing you to paddle against a stream of debt.

 

Do Not Buy Fuel on Credit

The same holds true for fuel, as it is something that is consumed. Rather make use of public transport where it is available, or drive to work with someone else. Share fuel costs where possible, or move closer to your work. Plan your trips to reduce the need to drive.

 

Cut on All Non-Essential Debts

Select one account to pay off as soon as possible. Pay all your debts through the normal instalments, but pay considerably extra on the particular debt. Start with the smallest account with the highest interest rate, as it will make it easier for you to pay off quickly. Once done, move on to the next debt. The only way to get out of debt is to stop making debt. If your vehicle is still drivable, get it serviced, but do not buy a new one on credit until you have paid off your credit and store accounts, in addition to personal loans.

 

How to Get Out of Debt If You Have Passed the Point of No Return?

It is possible to already be so entrapped in the credit cycle that it is too late to implement the above measures to get out of debt. If this sounds like your scenario, it is time to seek a more drastic solution. Voluntary sequestration is a legal process whereby you apply to court to have your estate surrendered, and to be declared bankrupt. Once you have been sequestrated, you will be completely debt-free, and can start fresh without living in fear of creditors knocking at your door to repossess your assets. You will lose immovable assets in the process, but being debt-free will help to rebuild your life. As soon as all requirements are met, you can apply for rehabilitation.

Do not let the credit cycle take over your life. Call on our attorneys to find out how to get out of debt in South Africa through voluntary sequestration.

 


Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.

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