BE ON THE SAFE SIDE, PAY YOUR DEBT
Managing your money
South Africa, like many other countries in the world, is experiencing economic problems. This is causing some people to lose their jobs and the price of basic needs like food to rise. The people who are likely to be affected the most are those who are already in serious debt.
National Credit Act
To prevent people from falling into the debt trap, government has put in place certain measures. The National Credit Act protects consumers by preventing credit-givers from lending money to people who cannot afford to pay it back.
Government put into practice the National Credit Act to make sure that consumers stay informed of their credit status and do not fall into debt that they cannot afford to pay back. Government did this because it believes that an informed consumer is a protected consumer.
A lot of South Africans have borrowed more money than they can afford. They are now unable to make regular payments and get deeper into debt or are blacklisted. Many of them believe that they will never be debt free. But there is hope.
Vuk'uzenzele spoke to Fatima Davids, a divorced single mother. She has to support her children on her small salary. Vuk'uzenzele asked her how she managed to recover from huge debt.
Davids' financial problems started when she divorced her husband. During the divorce she spent a lot of money on legal fees. This left her with a lot of debt. She was unable to pay off her debt and support her children as well.
She was so desperate that she contacted the Credit Ombud. He referred her to a debt counsellor to help her get out of debt.
The debt counsellor helped her by first working out a budget plan. The counsellor also talked to all her credit givers to work out a payment plan for her. "I had to follow the payment plan strictly," she said. The counsellor advised her to pay up the small debts first and then the large ones.
Davids was protected from getting into further debt through the National Credit Act. This was in line with the Act, which states creditors are not allowed to lend her any money until she paid off all her debt.
For example, a person who buys a car on credit and does not earn enough to pay this debt is the kind of person protected by the Act.
Her advice to people who have fallen into the debt trap is to be very careful. "You should seek help and pay your debts in time to avoid interest charges that worsen the debt", she said.
The best way to be debt free is not to ignore your debt. Admit that you have a problem and make a plan as soon as possible. Be on the safe side, pay your debt.
- Carol Netshifhefhe
A debt counsellor is someone who is registered with the National Credit Regulator. He or she helps consumers who have debt related problems. This includes being unable to pay monthly instalments or being blacklisted. Debt counsellors talk to credit providers and help to work out budgets and repayment plans.