Dealing with over indebtedness

Are you fed up with over-indebtedness? There are many people who are unable to repay their Debt on time. Thus it is very important for you to use money wisely.


IN our current state of economy it is common to have debt in order to make monthly ends meet. Taking out a loan does not necessarily mean that you are over indebted.

Having debt can be described by paying monthly instalments towards your creditors on a regular basis. Many individuals find themselves in financial strain situations due to current economical factors faced in South Africa.

Over indebtedness is when you have creditors but you can no longer make payments on a regular basis, which means that you will find yourself in default of those credit agreements. Being over indebted results from various factors including applying for loans which would render you over-indebted or living a lifestyle that is above your means or even by unexpected incidents. In our current day and time anything can happen, from being in a serious accident to losing employment.

These situations can incur serious debt; it can result in skipping payments to some creditors and only paying a few in order to keep head above water each month. In some cases people obtain goods because they think they need it to survive. This might be so but if you find yourself over-indebted then you need to make some changes to scale down in order to improve to your financial circumstances.

Over-indebtedness should be dealt with as soon as possible. Do not leave the situation to deteriorate before seeking financial assistance.


Debt consolidation loan is an actual loan which the consumer needs to apply and qualify for. It is a short term solution which requires strict financial discipline. It can also be seen as taking out one larger secured loan to pay back many others. Without financial discipline, debt consolidation may worsen their financial situation. The loan bears interest between 20 – 31% over 60 months. Not only are consolidation loans much more expensive than debt review it also bears great risk for the consumer. Often it is not an option or people find that they cannot pay the debt consolidation loan either.

Debt Counselling

Administration can be described as a negotiation where the credit providers only receive distributions every three months. Administration is applicable to judgments, non credit agreements and credit agreements to a maximum of R50,000. Distributions are done by an administrator and paid by cheque which leads to additional expenses for the consumer. Without reducing the interest rates, not reviewing the consumers file and all the hidden costs involved the consumer can be under administration for many years paired with a consistent increase in their outstanding balance.


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