Debt Rescue say people are indebted for failing to have a proper budget and live within their means.
South Africans are showing an improvement in way they handle their finances, says Stats SA.
According to statistics released recently, less South Africans were battling to pay their debt.
Statistician General Pali Lehohla said the number of summonses issued for debt decreased by 1.6%, and default judgments had also decreased by 6.7% in the three months ended July, compared to the same period last year.
The Statistician General added that the value of the debt has also decreased significantly in the same period.
“In July , 22 909 civil judgments for debt amounting to R345.1 million were recorded,” he said adding that loans amounted to the biggest portion of the debt at R101.8 million or 29,5% of the amount.
Debt Rescue CEO Neil Roets said most of the heavily indebted people ignored warnings:
– You are near the limit of your credit card and you cannot pay it back,
– You are skipping payments adding to you next month’s debt and your stress
– After paying your monthly installments, you have almost nothing left.
Roets said there were a few things that people could do avoid being dragged to court for failing to pay their monthly dues.
“It might help in the very short term to sell of a few assets to repay debt, however what happens once there is nothing left to sell, and there is still debt remaining, you must have a monthly budget to have a clear financial plan. Cut back on unnecessary expenses and avoid living beyond your means,” added Roets.
He warned that debt could add to one’s emotional baggage.
“Financial stress has the ability to consume your thoughts, and thereby affect your emotional wellbeing.
All of the above are classical signs that a person is over-indebted and needs professional help from a debt counsellor who can assist by renegotiating repayments, and ensuring that the person has sufficient funds remaining for living expenses whilst being protected from new legal action,” concluded Roets