Having various debt obligations these days, is nothing new. This includes debts like a credit card, a bond or a personal loan that you need to pay off. Face it – debt can become and in most cases is already part of your life. In certain circumstances it is not a bad thing – if you manage it properly of course. But, if you look at the current situation in South Africa, it is evident that personal and economic events can lead to over-indebted situations – threatening your financially-free future. However, it doesn’t help to mainly focus your attention on the problem; you have to get to the solution thereof, instead.
What plan is out there that you can incorporate that will save you money, keep you safe (financially protected) and will also give you some peace of mind? Matthys Potgieter, spokesperson and debt expert at DebtSafe, recommends the four-point rescue plan:
- Examine your current financial status
What does your financial situation look like? If you have a few ‘heavy’ (or ‘lighter’) debts, why don’t you sort it out? There is one of two options that you can consider when trying to get rid of your debt:
- you can either make use of the so-called snowball effect by paying off your smallest debt first (like a clothing account); or
- you can use the avalanche method – where you pay off your debt with the highest interest rate first, like your credit card.
- Don’t know what to do? Just ASK
If you are not sure how to improve your current financial situation – go and speak to a professional in the financial field to assist you in tackling your debt or managing your bills better. You have financial advisors, planners and bankers available. In worst case scenarios you can also ask debt experts, like DebtSafe for advice and use their processes to straighten out serious debt obligations.
- What to do if you are severely over-indebted?
Various financial experts say that debt review, administration and sequestration are considered solutions targeted at solving the debt problems South Africans currently face. But, Potgieter says: “If you are finding yourself in an extremely over-indebted position, consider debt counselling (debt review), because it is the preferable solution (of the three) – getting you safely out of debt.” With a personalised and effective debt repayment plan, trained advisors can take you from financial failure to financial success. This process is done via the implementation of the debt review program – where you get assistance from the application process (start) up to the issuing of a Clearance Certificate (finish).
- Get yourself covered by getting your DEBT insured
Life takes unexpected turns whether you want it to or not. Therefore, make sure that your debt is ‘insured’. Get credit linked insurance that covers certain debt repayments for up to twelve months (depending on your situation). This will enable you to take care of yourself and your loved ones when unpredicted (or in some cases predicted) things happen like critical illness, temporary or permanent disability, retrenchment, maternity leave as well as death. Take a look at DebtSafe’s effective Income Rescue Plan to assist you with making the best possible ‘debt insurance’ choice.
The Income Rescue Plan that DebtSafe offers includes the following:
DebtSafe will pay your debt instalments for up to 12 months while you are looking for a new job.
Your debt gets settled in the event of your death, keeping things hassle-free for your loved ones you leave behind.
DebtSafe will pay your debt instalments for up to three months when you are on maternity leave.
Critical Illness & Permanent Disability
DebtSafe will settle your debt so you can focus on your health and own wellbeing.
DebtSafe will also pay out a lump sum to ease the burden while you get your things sorted out.
Try and rescue yourself out of debt this year and get yourself covered and protected. It will not only guarantee you a financially-free future, but it will also give you peace of mind.