If you carefully budget every month and still find that you are not able to pay off, or even service your debts, chances are that there are more ways you can save money. If you came here in the hopes of finding miracle tips to get out of debt, you will be disappointed. Unfortunately, you must pay your debt. However, there are useful tips to get out of debt of which some are briefly shared below.

Spend Less

It seems obvious, and your debt may already seem like a mountain you will not be able to climb, but the only way to climb a mountain is to do so step-by-step. This means you need start somewhere, so start by analysing your spending. Check your bank statements to see instances where you spend money on luxuries. Take-out food is a luxury. Add all the take-outs, restaurant bills, and video rentals, and you probably already have several hundred rand that you can put towards your debt. Consider making fewer phone calls and restrict your data usage. Pay off your cellphone contracts and go onto a prepaid arrangement. Forget about movies and popcorn for a few months and put away your credit card. Stop buying food and clothing on credit. Buy food products such as sugar, rice, and the like in bulk. You pay less if you buy in bulk and shop for specials. Every cent you save on spending can go towards paying off debt.

Tackle the Debt

Understandably, you may wonder how these tips to get out of debt can help. Here is how:

  • The money you saved from not spending on luxuries can be used towards payment of debt.
  • Tackle one debt at a time with the extra money.
  • Pay it off completely and close the account where relevant.
  • Always pay off the smallest debt first.
  • With the money you have extra after you have paid off the smallest debt you can tackle the next one.

You, for instance, put the extra money you now have towards a clothing store account. Once it is paid off, you put the money towards the second-smallest debt. Remember that you already paid say, R500 a month on the second smallest debt. Now you add the R300 to the R500 and thus have R800 to pay on the second debt. Once paid off, you use the R800 to pay towards the third debt, and so it goes. After a debt has been paid, close that account. Soon you have a large amount free, which can be used to pay off your vehicle and then your house etc.

Tips to Get Out of Debt When You Face Judgments

If, however, the debt has already passed South Africa’s level of debt then you need quick intervention. If you own property or other assets, you can apply for voluntary sequestration. You must be able to prove that you are insolvent and must have sufficient assets to ensure that the sale thereof on auction by a curator will produce sufficient funds to pay the minimum of 20-25 cents out the rand to each creditor. The first step in the voluntary sequestration process is to make an appointment with our insolvency attorneys to help you determine whether you qualify for voluntary sequestration. They will also provide you with information about the consequences of sequestration, the process that will be followed, and how it will help you to get out of debt.

If you do not qualify for voluntary sequestration, they will still be able to give you tips to get out of debt. Alternatives include debt review, debt consolidation loans, and more.

Disclaimer: Information is relevant on the date of publishing and is not intended as any form of legal advice. Please call on our attorneys for legal guidance, rather than relying on the information herein to make decisions – December 2017.