Debt Expert Moeshfieka Botha


Posted by: Angie | 2013/06/14 10:13

Is it wise to resign and take my provident fund to pay off my debt?

I have an astonishing amount of personal cash loans and am battling to repay. I do not want to go for review as it might impact on my husband as he is going to expand his business and we are married in community so we will both be assessed should he want to take a 2nd bond. I have decided to resign and use my provident fund to pay every thing off. Is this a way out? After paying up all the cash loans I will only be left with my car installment to pay. I am 35yrs old and owe +/-R100 000 and am expecting to get R98 000 from my provident fund. Please advise as I really don't have any money for my living expenses as all the money is going to debit orders. I have never missed any payments so far.

expert answer

Posted by: Moeshfieka Botha | 2013/06/14 11:50


You wont find a single financial adviser that will tell you its a good idea to resign and use your provident fund to pay your debt.  Our country already has very high unemployment and the job market is difficult.  You might not be able to find another job soon.  The majority of people are also not making enough provision for their retirement as it is, and using your provident fund means you will join this already large part of society.  However, this is a decision only you can make, weighing up many factors relating to your personal situation, like will you be able to find a job, how quickly will you be able to start saving for retirement again.  Then the big question is also, if you managed to get yourself into this position once, what will prevent it from happening again.? And the second time you wont have a provident fund to fall back one. I would suggest that you consult a debt counsellor. Debt counsellors can negotiate with creditors for lower instalments. Once you are paying lower amounts on your debt - you will have more money left for your living expenses. The fact that you have never missed a payment is a good thing. Should you opt for debt counselling, regular payments are vital.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers, and disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site.

user comments

Posted by: Gabriel | 2017/08/05 09:42
I am blacklisted I have a gud job of my dreams but im resigning cause i owe lot of dangerous pple.i only resign cause i cant get R50 000 anywhere. My net is 11000-16000p/m and ive been living by loan sharks now i cant afford to pay back. For now is the only option for me
Reply to Gabriel
Posted by: Anonymous | 2017/07/30 18:38
I have recently resigned from my job and management is not too happy . I just want to know if HR can withhold or delay my provident fund claim as I require it for relocation
Reply to Anonymous
Posted by: nhlanhla | 2016/07/26 01:32
hi, i got a new job but they are dealing with the same thing that I was doing in my previous company (tyre industry ),so i want to know if my p.v.f will be automatically transfer to my new company or it up to me if I want to claim it?
Reply to nhlanhla
Posted by: Curios | 2015/06/13 16:00
I am a kumba iron ore worker for over 23 years noe,Im currently under debt review,My question to you is can I borroe money from myprovident. Fund to buy my house,is it possible.
Reply to Curios
Posted by: Peneke | 2013/06/20 13:06
Going the debt counselor route defeats the objective which is to get credit for expansion. She would not get credit when under debt counselling.
Reply to Peneke
Posted by: Anonymous | 2013/06/18 13:39
Pay more than you bank requires.
Reply to Anonymous
Posted by: Mmabatho | 2013/06/16 19:25
My house bond is R960000,how can I pay it in less than 14 years ?Will paying extra money monthly help ?
Reply to Mmabatho
Posted by: Leilani | 2013/06/18 15:25
Yes paying more than your due installment will reduce your payment period significantly
Posted by: The Oracle | 2013/06/18 11:55
Your question makes no sense at all

comment on this story

Read the comments policy
Your comment has been posted and will appear shortly.
Please fill in the required fields.