When do You Need Help?

Many South Africans are struggling to meet their monthly debt obligations because of several factors, including the ever-increasing standard of living. With the economic impact of the current pandemic more families will need assistance to restructure finance to make ends meet.

The final step on the path to financial success is knowing when to request assistance. These warning signs may indicate you need help:

• Are you living paycheck-to-paycheck with no money going into savings?
• Are you alternating which bills to pay each month, leaving some unpaid?
• Are you late making payments?
• Are you using one credit card to make the payments on another?
• Do you have creditors calling you?
• Are you being denied credit?

According to the National Credit Act (NCA), you are over-indebted if you are unable or struggling to pay all your debt on time. If you find that your debt-to-income ratio is more than 43% or if more than half of your income goes towards your debt repayments, you should seek help.

You could ask for help from your bank’s financial advisor. Many banking institutions have financial planners who may assist in finding ways to begin planning and saving for the future.

Or you could go for debt counselling. This is a debt relief programme that helps over-indebted consumers through an affordable repayment plan to repay their outstanding debt. A debt counsellor will determine how indebted you are by measuring your expenses and liabilities against your income. If the former two exceed the latter, you are over-indebted. Any person who feels over-indebted can apply for debt counselling, and you can jointly apply with your spouse if you are married in community of property.

Click here to view an interview with Rene Moonsamy, director and registered debt counsellor from the National Debt Counsellors on the Debt Counselling Process.