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3 steps to get out of debt

Apr 26 2016 17:24

Cape Town - The latest quarterly reports released by the National Credit Regulator (NCR) show that South African’s are still over-burdened by personal debt issues, leaving them trapped with nowhere to turn, except to more debt, says Wendy Monkley, head of marketing at DebtBusters.

Statistics show that there are close to 24 million credit active South Africans. Ten million of them are in arrears on their accounts or are struggling to pay their monthly debt repayments.
DebtBusters has seen a major uptick in the number of consumers enquiring about and signing up for debt counselling.
"April has been a tough month with increases in fuel, electricity, interest rates, sin tax, food and the general cost of living.

“When we assess the debt situation of our clients prior to debt counselling, we can see that many of them need all if not more than their monthly salaries just to pay their debt repayments, leaving little or nothing for living expenses," said Monkley.

"That is why they start missing payments. Eventually ‘robbing Peter to pay Paul’ is the only way they can free up cash flow for buying food and paying rent."

Almost a quarter of DebtBusters' clients in 2015 had payday loans when they came for debt counselling. This is an indication of how desperate these people are for cash, in Monkley's view.

She offers three steps to fight debt:

Draw up a budget

List all your living expenses and debt repayments. Work out whether or not you can afford to pay for everything.
Take control of your expenses

Find ways to cut back on unnecessary spending. Pay off small accounts and close them so that you do not incur monthly fees. Once you have paid off an account, use the spare cash to pay off the next one and keep going until you have no accounts left.

Ask for help

If you can’t make ends meet and can’t see a way out, ask for help by contacting your credit providers for a reduced payment plan. If you still can’t make ends meet, you could consider contacting a debt counsellor to assist you.

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debtbusters  |  money  |  debt


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