How To Get Rid Of Debt Fast In South Africa

What is debt?

Debt is defined as owing money, owed money that is past due or the feeling as if you owe someone something. An example of debt is what you owe on your mortgage and car loan. An example of debt is a feeling of gratitude when someone helps you to go to college. Something owed by one person to another or others.

How To Get Rid Of Debt Fast In South Africa

Acknowledge and assess

The process starts by first acknowledging that you are in debt and that you want to be debt-free. Then assess how much debt you have; this includes home loans, car payments, credit cards, student loans etc. Record how long you have to pay off each debt, the interest rate you’re paying on each of them and what your monthly payments are. Adding all these payments up and seeing a big figure may be discouraging, but don’t lose hope: this is going to allow you to break down your debt into manageable chunks and find extra money to pay it all off, one at a time.

Create a plan

At this point, you have all of the information you need to create your debt repayment plan. Your plan doesn’t have to be complicated. Here are three important questions you must answer when creating a debt repayment plan:

Beyond your minimum monthly payments, how much extra money can you put towards your debt each month?
Which debt will you put that money towards first?
How will you prioritize those other payments once that first debt is gone?

Track and control

This means tracking your spending and controlling your expenses. Paying off your debt will require a change in your regular spending patterns, especially if you want to pay it off quickly. The first step towards changing those patterns is knowing what you’re spending your money on in the first place. This will show you where you’re spending more than you should, and where you can cut off costs to free up some money towards paying off your debts. For example, tracking your water and electricity bill is one way to control your expenses.

Pay cash

Swiping a card for every purchase is easy, but it also makes it easier to spend more than you have. In your monthly budget, allow yourself only specific amounts for items like groceries, fuel and recreational purchases. Withdraw money to use so that you have a fixed amount to spend. The money left over in your account should be used to pay off large debts.

Build wealth

Once you start to track your spending, you’ll begin to see some extra money you can use towards paying off your debts or even to start saving. It may be tempting to treat yourself to something nice to wear, but don’t fall back into the bad habits that landed you in debt in the first place. Make your money work for you so that you can have no more debt.

Frequently Asked Questions(FAQs)

How can I clear my debt in South Africa?

You will have to apply – and there’s a deadline

The debts won’t be automatically written off – you will have to apply to the National Credit Regulator (NCR), who will decide whether your situation is desperate enough. There will be a window of four years to apply from when the bill takes effect.

Can debt be written off in South Africa?

Prescribed debt refers to the debt that has not been recognised by the creditor or been paid towards for more than 36 months. This is considered old debt by creditors and may then be written off.

How long can you legally be chased for a debt in South Africa?

Time limitations The Statute of Limitation is three years in South Africa. Once this time period has elapsed the debtor can refuse to pay the outstanding account, unless summons has been issued by the courts prior to the expiration date.

How long does blacklisting last in South Africa?

This judgment will stay on your report for five years, unless a court of law rescinds the judgment before this time. Paying off the debts that appear on your credit report on time will help you to prevent negative information from appearing on your credit report.

What happens after 7 years of not paying debt in South Africa?

Unpaid credit card debt will drop off an individual’s credit report after 7 years, meaning late payments associated with the unpaid debt will no longer affect the person’s credit score.

What happens if you can’t pay your debt in South Africa?

What happens if I can’t pay my full debt review? If you can’t honour your debt repayment plan by falling short on your payments or not paying them at all, your credit providers will start taking legal action. This should be avoided at all costs. The debt review process is a lifeline.14 Nov 2020

Is there a way to clear all debts?

Mathematically, the most effective way to eliminate debt is to follow the avalanche method, in which you list your debts from highest to lowest by interest rate. Pay the minimum balance on each, then dedicate as much extra as you can each month to the one with the highest interest rate

How can I pay off debt with no money?

Look for Debt Relief

Apply for a debt consolidation loan. Debt consolidation allows you to convert multiple debts, commonly several credit card balances, into a single loan.
Use a balance transfer credit card.
Opt for the snowball or avalanche methods.
Participate in a debt management plan.

Can I legally write off my debt?

Most creditors are able to consider writing off their debt when they are convinced that your situation means that pursuing the debt is unlikely to be successful, especially if the amount is small.

Is being debt free the new rich?

Is being debt-free the new rich? Yes, as long as you have money and assets, in addition to no debts. Living loan-free is a fantastic way to stay financially secure, and it is possible for anyone. While there are a couple of downsides to being debt-free, they are minimal

Can you go to jail for debt in South Africa?

You cannot go to jail for not paying your debts when there is a judgment against you. You can, however, be liquidated, sequestrated, an emoluments attachment order placed on your salary or your assets attached.

What do I say to creditors if I can’t pay?

– Stay calm. Explain your financial situation and how much of the bill you are able to pay, according to your repayment plan. – Dispute debts in writing. If you believe you don’t owe the amount claimed or otherwise disagree, make your reasons known promptly in writing to both the creditor and the collection agency