Debt can be crippling and affect all aspects of your life, happiness and health. Debt is also expensive and keeps you from reaching your financial goals. Settling it should be your top financial priority.
If you do not manage your debt properly you could be declared insolvent, something that will affect and make your financial life difficult for years to come.
Do not ignore your debts or your creditors! Pretending they are not there will not make them go away. If you are struggling to get out of debt seek professional advice. The National Credit Act provides consumers with ways to seek relief and assistance. More details can be found on the National Credit Regulator website.
You are in debt if you cannot meet your monthly payments and expenses including, credit cards, accounts, housing bonds, vehicle repayments and personal loans.
How to get out of Debt
Make a firm decision that you will do what is required to get out of debt, formulate a plan and stick to it.
- Assess which debts are the most urgent i.e. which is going to result in legal proceedings or black listing?
- Assess which debt is costing you the most.
- Cut up your credit cards.
- Pay wherever you can, even if it is not the full instalment it helps prevent interest charges from accruing.
- Talk to your creditors. If they can see you are doing all you can and you are willing to repay your debt, most will help you to restructure your repayment plan.
- Do not borrow more money to pay off debts.
- Do all you can to avoid cancelling insurance policies and investments. Early surrender usually involves financial penalties. In addition, once you are back on your feet, you may find your health or circumstances have changed such that you can no longer get risk cover.