In many drastic or emergency situations, any one of us could find ourselves in over our heads financially, wracked with anxiety over our inability to repay our debts. Retrenchment and sudden unemployment, divorce, an unexpected medical scenario and/or emergency expenses, continuous fuel price hikes, the list goes on. No-one is immune from becoming over-indebted.
You’re not alone
Statistics show that more than 11 million credit-active South African consumers are over-indebted. The majority of debt (94%) is caused by personal loans, 84% due to irresponsible use of credit cards, and 76% as a result of store cards.
How do you know if you may be over-indebted?
Being hounded by credit providers who claim that you need to pay the full arrears on your account or legal steps will be taken against you, borrowing money to pay other debts, using your credit card and/or overdraft facility to pay debts, or skipping payments on some accounts in order to pay others, are all red flags that you may be over-extended.