How to get out of debt in SA must be the most searched question on the web. Why? Because a large number of consumers are struggling financially. How many people do you know that is struggling financially?
Overindebtedness in South Africa is a serious issue, but there are ways to regain control of one’s finances. It is important to assess your financial situation, prioritise your debts, find professional advice to become debt-free and live a stress-free life.
What kind of solutions does South Africa offer to consumers to get out of debt?
There are several solutions available to consumers struggling financially. That being said, you cannot make a decision regarding a debt relief solution by reading an article on the internet. You need to appoint a debt relief expert that can help you find the optimal debt relief solution to your specific situation.
- Debt Mediation
- Debt Review also known as Debt Counselling
- Declaring Bankruptcy / Insolvency / Sequestration (Same process – different names)
Debt mediation is normally the first step towards getting out of debt. However, this process is not straightforward, and creditors may not adhere to the arrangements you have made for lower payments if these are not facilitated by a qualified debt counsellor. Furthermore, even with a counsellor, creditors can choose to withdraw from the process if they believe the amount they receive is insufficient to service the debts.
From the listed solutions above, debt review is likely the solution that is most frequently chosen, as it ensures that you do not lose your home if it is still bonded or your vehicle if it is still financed. While this does not necessarily make debt review the best solution, it is the option that most people find more acceptable.
However, when taking into consideration that debt review does have a place in South African law as a debt relief solution, it doesn’t mean that you will be debt-free quickly and efficiently. This will all depend on the total amount of debt and the monthly repayment in terms of your affordability.
That is why it is so important to get a debt expert to help you in making the biggest decision you will ever make in terms of your financial situation. Finding the right solution for you and your specific circumstances.
The question you need to ask yourself is not which debt relief solution will be the easiest but rather which debt relief solution will help me get out of debt in the most cost-effective and timely manner.
If you find yourself genuinely over-indebted, you will need to make sacrifices to pay off the debt as soon as possible.
That being said, if you consult a professional debt relief consultant, you will be able to determine which solution will be the most cost-effective and timely way to get out of debt. Rather than wasting time on a process that is unlikely to be sustainable, even if it results in the loss of your house and your vehicle.
What is insolvency in South Africa?
In South Africa, insolvency occurs when a person is unable to pay their debts. This is a high court application, and in terms of getting out of debt, it is by far the most cost-effective and timely method to achieve this. A court order will ensure that debts are written off. This process is regulated by the Insolvency Act, Act 25 of 1936.
How secure are insolvency proceedings in South Africa?
Insolvency proceedings in South Africa are generally considered a structured and regulated process. It is a completely safe and legal process that guarantees immediate debt relief.
We recommend that you use an expert to assist you herein.
Disclaimer: The article is for informative purposes only. It does not serve as legal advice, nor is it intended as such. Please speak to our attorneys before relying solely on the information herein to make any decisions.