If you are looking for debt-free solutions, you may be tempted to opt for a debt consolidation loan. However, the keyword here is loan. You are thus still in debt, just to a single creditor. With this option, you may also be tempted to keep on using your store and credit cards, which will lead to more debt. We thus recommend looking for debt-free solutions that will truly help you get out of debt, such as the ones discussed below.

Making arrangements with each of the creditors

If you have the money to keep on paying the creditors, but have a short-term cash flow situation, you can negotiate lower instalments or delayed payments with the creditors. Explain your situation and if they accept the proposal, keep to the agreed payment terms.


If you have lost your income or if your debt is below R50 000, you can apply to enter administration. This will allow you to pay lower monthly instalments, but with the high interest rates associated with this method, you may end up paying for a long time. It is not the best debt solution and only recommended if debt review or sequestration is not applicable to your situation. It may be best to borrow money from a family member or to sell off your assets in order to pay the debt.

Debt review

You can apply for debt counselling if your debt is more than R50 000 and you have a monthly income. Note that just as with administration, you will not be able to apply for credit. You may not skip one payment as this will leave the debt review agreement void and the creditors can then demand immediate payment of the full amounts owed. With this solution, the debt counsellor will negotiate lower monthly payments that will be consolidated into a single instalment and the agreed amounts will be distributed to the creditors. No further legal action can be taken against you once under review, as long as you keep to the payment agreement. It is not recommended if it will take longer than five years to pay off the debt.

Voluntary sequestration

With this method, you will be able to get rid of up to 80% of your debt with the remainder payable as a lump sum or over a period of 18 to 24 months. You need an income and must have sufficient assets to ensure that the sale thereof by the appointed trustee will realise enough benefit to the creditors. Only if the court is satisfied that the creditors will receive sufficient benefit will the order be granted. You can enter into credit agreements thereafter, subject to approval by your trustee. You cannot be a director of a company while under sequestration.

The creditors must at least receive 10 to 20 cents out of the rand for the application to be successful. You will need to make use of an attorney to handle the court application. This debt-free solution is suitable if you have immovable property and substantial debt.

Discuss your particular debt situation with our team of insolvency attorneys to help you choose the most appropriate solution.